The board of ICICI Bank is meeting on Thursday to consider a proposal to delist ICICI Securities in which it holds nearly 75 per cent.

While neither company’s statements mentioned a share swap, they said their boards will consider a delisting proposal under a regulation requiring the parent company to “provide for the issue of its equity shares instead of cancellation of any equity shares in the delisting subsidiary”.

News of the delisting sent the shares of ICICI Securities soaring on Monday. It hit a 52-week high of Rs 650 during intra-day trades, a gain of nearly 15.30 per cent. The counter closed at Rs 622.30 — a rise of 10.38 per cent or Rs 58.50.

In a regulatory disclosure, the bank said: “A meeting of the board of directors of ICICI Bank Ltd is scheduled to be held on Thursday, June 29, 2023, to consider a proposal for the delisting of equity shares of ICICI Securities Ltd, a listed subsidiary company of the bank, under a scheme of arrangement with the bank under Chapter VI, Part C, Regulation 37 of the Sebi (Delisting of Equity Shares) Regulations, 2021’’.

In a separate announcement, ICICI Securities said its board of directors would meet on Thursday to consider the delisting proposal.

ICICI Securities, in which ICICI Bank holds 74.85 per cent, is present in four lines of business that includes broking, distribution of financial products, wealth management and investment banking. It serves retail and institutional investors, corporates and high net worth individuals.

The company is registered with the Securities and Exchange Board of India as stock broker, merchant banker, portfolio manager, investment adviser and research analyst.

It is also registered as corporate agent with the Insurance Regulatory and Development Authority of India (IRDAI) and Point of Presence (POP) with the Pension Fund Regulatory and Development Authority of India for the distribution of the National Pension Scheme.

Since getting listed at Rs 520 per share more than five years ago, ICICI Securities has disappointed the markets relative to other ICICI Bank arms such as ICICI Prudential Life Insurance Company and ICICI Lombard General Insurance Company.

However, the market is buzzing over the possibility of the shareholders of ICICI Securities getting shares of ICICI Bank, unlike other cases of delisting.

The swap ratio is likely to be decided on June 29.

Sebi’s delisting rules — under Chapter VI, Part C — deal with a subsidiary company getting delisted through a scheme of arrangement wherein the listed holding company and the arm are in the same line of business.

The delisting shall be permitted subject to the listed holding company issuing its equity shares in lieu of cancellation of any shares of the subsidiary.

With inputs from Reuters