NCLT approves delisting of ICICI Securities, dismisses plea raising objection

Mumbai: The Ahmedabad bench of the National Company Law Tribunal on Wednesday approved an application filed by ICICI Bank for delisting its financial broking arm ICICI Securities from the stock exchanges. 

The tribunal, led by justice Shammi Khan, while approving the scheme, dismissed two applications objecting to the scheme of delisting.

A detailed order is awaited in the matter.

The Mumbai bench of the National Company Law Tribunal, in its 21 August order, had also approved the company’s delisting plans while rejecting the objections against it.

ICICI Securities declared in June 2023 that it would delist and continue as a wholly owned subsidiary of ICICI Bank. In March 2024, the plan was accepted by shareholders, with 72% of minority shareholders voting in favour of it. The plan was authorised by the ICICI Bank board on 29 June, 2023.

The delisting plan included ICICI Securities becoming a wholly owned subsidiary of ICICI Bank. As a part of the plan, shareholders were to receive 67 shares of ICICI Bank for every 100 shares of ICICI Securities held.

However, shareholders Manu Rishi Gupta, an investor, and Quantum Mutual Fund had opposed the proposed delisting of ICICI Securities in two different petitions before NCLT, claiming that the swap will negatively impact minority shareholders. Manu Rishi Guptha and Quantum Mutual Fund, respectively, own 0.002% and 0.08% of ICICI Securities' paid-up equity share capital. 

ICICI Securities contested the claims, stating that the applicants had no locus in the matter. It said under the Companies Act section 230(4), any objection to the compromise or arrangement shall and only be made by people who hold not less than 10% of equity or 5% of the total outstanding debt.

The shareholders expressed concerns over ICICI Securities' low value and share-swap ratio as the proposal moved forward. They also questioned the deal's fairness considering the stock's low price in comparison to its potential.

Also Read: ICICI Securities case: Is shareholder activism maturing in India?

In November, the Reserve Bank of India approved delisting ICICI Securities and making it ICICI Bank's wholly-owned subsidiary, subject to certain conditions.

Later, it also received 'no objection' letters from the stock exchanges for delisting shares of the broking arm on 29 November, 2023.

The NCLAT had on 1 October issued a notice to ICICI Securities following an appeal by the minority shareholders against the tribunal's order approving the financial broking firm's delisting.