ICICI Bank, India’s second-largest private-sector bank, said Friday it has pared its stake in its broking and investment unit as part of steps to meet regulatory norms.
The bank sold 6.44 million shares, or a 2% stake, in ICICI Securities Ltd on the open market for Rs 310 crore, it said in a stock-exchange filing. It didn’t name the buyers.
According to a person aware of the development, IIFL Mutual Fund bought about 2 million shares at Rs 480 apiece.
This is the third unit in which ICICI Bank has sold a stake in as many months. The bank divested a small chunk of its holding in its life insurance arm in June and offloaded a 3.96% stake in its general insurance unit the same month.
Following this divestment, ICICI Bank’s stake in the broking unit will fall to 77.22% from 79.22%.
The bank said that the stake sale was intended to meet regulatory guidelines. According to the Securities and Exchange Board of India’s rules, promoters of a listed company must bring down their stake to 75% within three years from the date of listing the company to meet the minimum public shareholding requirement of 25%.
ICICI Securities was listed on the stock markets in April 2018. At the time, the bank diluted about 21% stake in the unit. This means ICICI Bank has time until March 2021 to reduce its stake in the unit below 75%.
ICICI Securities offers services like broking, distribution of financial products, wealth management and investment banking.
Shares of ICICI Securities gained 0.21% on Friday to end at Rs 492 apiece. ICICI Bank shares jumped 4.4% to Rs 409.75 in a Mumbai market that rose 0.9%.