ICICI Securities IPO subscribed 36% on Day 2

NEW DELHI: The initial public offering (IPO) of ICICI Securities, the brokerage arm of private lender ICICI Bank, was subscribed 36 per cent till 5 pm on Friday, the second day of the bidding process.

Investors bade for 1,59,57,060 shares as against the total issue size of 4,42,25,343, NSE data showed.

The price band of the issue has been fixed at Rs 519-Rs 520 per share. ICICI Bank aims to raise about Rs 4,017 crore at the upper end of the price band by selling 7.7 crore shares or 24 per cent stake in ICICI Securities.


Analysts expect the issue to attract huge investor interest, but suggested only long-term investors should consider the issue.

"In the past two years, the broking industry in India has witnessed growth in terms of increase in new accounts, higher income from distribution business and a sharp rise in primary market transactions. Given ICICI Securities' presence across different segments, the customer base helps the company explore new opportunities. We recommend Subscribe to the issue," said Kotak Securities in a note.

In the last five years, revenue, Ebitda and net profit for the broking firm have seen compounded annual growth of 19 per cent, 38 per cent and 45 per cent, respectively.

“At the higher end of the price band, the issue is expensively priced at 49.6 times its FY17 earnings and 34.2 times FY17 book value. The business of ISec cannot be exactly compared with other brokerages due to their vast digital footprint that aids maximum revenue for the company compared with other brokerages which are relatively gaining more from branch based business,” said Centrum Broking in a note.