Indias ICICI Bank Sells 2% In Brokerage Unit For $42m

The open market sale comes at a time business is booming for broking firms given the rush of new retail participants following the sharp market rally since March.

Shares of ICICI Securities closed at ₹492, up ₹1.05 or 0.21% on BSE.

The bank sold these shares as part of its effort to raise public holding in ICICI Securities to 25%, the mandatory minimum for all listed companies. After the sale, ICICI Bank still holds 77.22% stake in the subsidiary.

“As a step towards ICICI Securities Ltd’s compliance with the requirements of minimum public shareholding… ICICI Bank Ltd, the promoter of the company, has today divested 6,442,000 equity shares of face value of ₹5 each of the company, representing 2% of the equity share capital of the company on 30 June 2020,” an ICICI Bank statement to the stock exchanges said.

Shares of ICICI Securities have surged 84% from their March low, gaining 22.62% in this year so far. Parent ICICI Bank too has surged 89% from its March low but is down 24% in 2020 so far.

However, ICICI Securities shares are below its issue price of ₹520 when it debuted in stock markets in April 2018.

As retail investors flocked to equities to take advantage of the market crash in March, average daily cash trading volumes rose in the June quarter, lifting revenues and earnings at broking firms.

At ICICI Securities, profit before tax rose 47% year-on-year (y-o-y) to ₹260 crore in the June quarter.

In the equities business, ICICI Securities saw a 90% y-o-y increase in the number of customers trading on a daily basis.

The strong growth in brokerage business was partly offset by muted performance in distribution while investment banking revenues rose 34% y-o-y and more than doubled sequentially during the period.