| Log in
Photo Credit: Shah Junaid/VCCircle

ICICI Bank’s stock brokerage unit files for IPO

15 December, 2017

ICICI Securities Ltd, the stock brokerage and merchant banking arm of ICICI Bank, has filed a draft red herring prospectus with the Securities and Exchange Board of India for an initial public offering.

ICICI Bank will sell about 64.43 million shares, or a 20% stake, in the unit via the IPO, India’s biggest private-sector lender said in a stock-exchange filing on Friday.

The bank, which fully owns the stock brokerage arm, had first disclosed the unit’s plans for an IPO last month.

Last week, VCCircle reported that had picked merchant bankers to manage the share sale.

The IPO size is estimated to be around Rs 5,000 crore ($780 million), according to two people in the know of the matter. This would value ICICI Securities at roughly Rs 25,000 crore ($3.89 billion), they said.
ICICI Securities will be the fourth group company to float an IPO. ICICI Bank had gone public in 1998. ICICI Prudential Life Insurance Co Ltd went public in September 2016 through a Rs 6,056-crore ($904 million) IPO while ICICI Lombard General Insurance Co Ltd went public last month through a Rs 5,701-crore offering.

ICICI Securities will join a bunch of peers including Edelweiss Financial Services, Motilal Oswal Financial Services, IIFL Holdings Ltd and Emkay Global Financial Services Ltd on the stock exchanges.

Incorporated in March 1995, ICICI Securities provides institutional and retail broking, merchant banking, and advisory services to corporates, financial institutions, high net-worth individuals and retail investors in India.

The company, formerly known as ICICI Securities and Finance Company Ltd, also operates online broking platform ICICIdirect.com.

ICICI Bank’s shares on the BSE fell 0.36% to close at Rs 303.45 on Friday. The benchmark BSE Sensex gained 0.65%.

Here’s a snapshot of the proposed IPO.

Issue
ICICI Bank will sell about 64.43 million shares, or a 20% stake, in the unit via the IPO. ICICI Bank’s stake will drop to 80% after the issue. The bank will get three years from the date of listing to comply with SEBI’s norms for a 25% minimum public float.

Use of proceeds
The entire IPO is a secondary market sale and the proceeds will go to ICICI Bank, the selling shareholder.

Bankers
Bank of America Merrill Lynch, Citigroup Global Markets India, CLSA India, Edelweiss Financial Services, IIFL Holdings and SBI Capital Markets are the merchant bankers managing the share sale.

Lawyers
Cyril Amarchand Mangaldas is the lawyer representing ICICI Bank and ICICI Securities in the IPO. S&R Associates and Davis Polk & Wardwell are India and international legal counsel, respectively, representing the merchant bankers in the IPO.

Company
ICICI Securities provides institutional and retail broking, merchant banking, and advisory services to corporates, financial institutions, high net-worth individuals and retail investors in India.

It also operates ICICIdirect.com, an online broking platform to invest in equity, derivatives, currency futures and mutual funds, among other products. It provides research information, stock picks and mutual fund recommendations.

The company operates out of 66 cities and towns in India. It is based in Mumbai and has offices in other regions of India besides offices in the US, Singapore, Oman.

According to its annual report, the brokerage and financial services company had helped four million retail customers with their investments in 2016-17, providing them with research, advisory and execution solutions.

The company’s corporate finance business has also strengthened its equity capital business to lead the IPO markets. In 2016-17, it has managed 12 IPOs with a 57% market share.

The firm operates through a network of 200 branches that it owns, besides 2,600 branches of ICICI Bank and 4,600 sub-brokers affiliated with the firm, as on 30 September 2017.

The firm caters to 3.8 million operational or active accounts through ICICIdirect. Since its inception 22 years ago, the company has acquired a total of 4.4 million customers through ICICIdirect’s platform.

Financials
ICICI Securities reported consolidated net profit of Rs 246.05 crore for the six months ended September 2017 on consolidated revenue (from operations) of Rs 773.26 crore.

For financial year 2016-17, the company reported consolidated net profit of Rs 338.59 crore on revenue (from operations) of Rs 1,274.18 crore.

The firm’s revenue grew at a compounded annual rate of 13.37% from financial year 2013 to 2017.

Its net profit has recorded a CAGR of 36.39% during the last five years up to March 2017.

Like this report? Sign up for our daily newsletter to get our top reports.


Leave Your Comment
ICICI Bank to float IPO of stock brokerage unit

ICICI Bank to float IPO of stock brokerage unit

Ankit Doshi 8 months ago
ICICI Bank Ltd, the country’s largest private-sector bank by assets, said on...
ICICI Securities seeks $2.6 bn valuation via IPO

ICICI Securities seeks $2.6 bn valuation via IPO

Ankit Doshi 3 months ago
ICICI Securities Ltd, the stock broking arm of ICICI Bank Ltd, is seeking a...
ICICI Bank hires merchant bankers for IPO of stock brokerage unit

ICICI Bank hires merchant bankers for IPO of stock brokerage unit

Ankit Doshi 6 months ago
ICICI Bank Ltd, India’s largest private-sector bank by assets, has hired...
No Comments

ICICI Bank’s stock brokerage unit files for IPO

Powered by WordPress.com VIP