ICICI Securities shares fall 5% after NCLT approves delisting from stock exchanges

Shares of ICICI Securities fell 5% to the day’s low of Rs 808.55 on the BSE after the Mumbai bench of the National Company Law Tribunal (NCLT) approved the company’s application for delisting the company from the stock exchanges on Wednesday.

The division bench of Justice Virendra Singh G. Bisht and a technical member Prabhat Kumar, while approving the scheme in an oral order, also dismissed two applications that objected to the delisting scheme.

Earlier on August 5, the NCLT Mumbai had reserved its order after hearing both sides.


Prior to this, ICICI Securities had countered the objections, arguing that the two applications against its proposed delisting go against the principle of shareholder democracy and should be dismissed.

The country’s second-largest private-sector lender, ICICI Bank’s affiliate firm, argued that the applicants have no legal standing to file the applications or raise any objections.

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During the arguments, Senior Counsels Janak Dwarkadas and Chetan Kapadia appeared for ICICI Securities and argued that the provision to Section 230(4) of the Companies Act provides that any objection to a scheme of arrangement under Section 230 of the Act shall be made only by persons either holding at least 10% of equity or 5% of the total outstanding debt, as per the latest audited financial statement.

“In view of the minuscule shareholding of the Applicants, it is submitted that the Applicant is not entitled to object to the Scheme and Application is therefore not maintainable,” argued the company further.

In two separate applications, Quantum Mutual Fund and investor Manu Rishi Guptha have opposed the proposed delisting of ICICI Securities, arguing that the share swap negatively impacts minority shareholders. Quantum Mutual Fund and Manu Rishi Guptha hold 0.08% and 0.002% of the paid-up equity share capital of ICICI Securities, respectively.

The company, while opposing the minority shareholders’ applications, also argued that the delisting proposal has been approved by 93.82% of ICICI Securities' equity shareholders. Additionally, 71.89% of the public shareholders have also endorsed the proposal, which is well above the required threshold under the law.

ICICI Securities’ shares have increased by 29% in the last one year while in the last 6 months, the stock has tumbled by 1.25%. The shares have increased by 11% in the last 3 months.

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