The Quantum Long Term Equity Value Fund and Quantum ELSS Tax Saver Fund are shareholders of both companies, ICICI Bank and ISEC.
Quantum Mutual Fund has voted against ICICI Bank and ICICI Securities merger, citing a loss of Rs 6.08 crore to its unitholders.
The Quantum Long Term Equity Value Fund and Quantum ELSS Tax Saver Fund are shareholders of both companies, ICICI Bank and ISEC. Quantum Mutual Fund said it did not find the swap share ratio lucrative to the shareholders of ICICI Securities.
“It is our opinion that the recent proposal by ICICI Bank to merge with ISEC (ICICI Bank owns a 75 percent equity stake in ISEC) is detrimental to the interests of our unitholders as we believe it undervalues ISEC and gives ICICI Bank access to the full business of ISEC at a less than the fair market price,” the fund said in a statement.
According to the fund, ICICI Bank wants to merge its 75% subsidiary ICICI securities (ISEC) with itself, offering investors 0.67 shares of ICICI Bank for every one share in ISEC. ISEC listed on April 4, 2018 at Rs 432, which was a 17% discount to its IPO price of Rs 520. “Had a reverse merger swap ratio set on the day of its listing, the ratio would have been set at 1.65 ICICI Bank shares for every 1 share of ICICI securities (a 146% premium to the current offer) based on the closing price for both the companies,” the fund added.
The largest public shareholder Norges Fund Investment Bank, however, has voted in favour of the proposal of the stock broking arm of ICICI Bank.
The foreign fund holds nearly 3.25 per cent stake in ICICI Securities.
The move is a shot in the arm of ICICI Securities’ plan to delist itself as it needs two-thirds of the public shareholders’ support to pass the resolution. Shareholders of ICICI Bank and ICICI Securities are expected to meet on March 27, to transact the proposed scheme.
ICICI Securities announced the plan to delist in June 2023. If the resolution goes through, ICICI Securities will eventually become a wholly-owned subsidiary of ICICI Bank.
