The National Company Law Appellate Tribunal (NCLAT) has dismissed a series of appeals contesting the green light given to ICICI Securities’ delisting. This decision cements the firm’s transition into a wholly-owned arm of ICICI Bank.
The legal challenge stemmed from the National Company Law Tribunal’s (NCLT) approval of a scheme that facilitates the delisting of ICICI Securities from the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). Under this arrangement, public shareholders of ICICI Securities would receive shares of ICICI Bank in exchange for their holdings.
Listed in 2018, ICICI Securities found itself constrained by regulatory barriers preventing ICICI Bank from directly engaging in securities broking. The delisting initiative was designed to streamline operations and enhance financial stability.
Objections were raised by Quantum Mutual Fund and investor Manu Rishi Guptha, who challenged the deal on multiple fronts:
- Undervaluation Concerns: They argued that the share swap ratio undervalued ICICI Securities and that an alternative price discovery mechanism would have yielded better returns.
- Transparency Issues: They contended that key financial details and regulatory exemptions were not sufficiently disclosed.
- Alleged Influence Campaign: Accusations were made that ICICI Bank and ICICI Securities attempted to sway shareholder opinion in favor of the deal.
Despite these objections, the NCLT had previously ruled that the scheme met all legal and regulatory requirements and was backed by a significant majority of shareholders. Furthermore, it noted that the challengers lacked the minimum 10% shareholding threshold required to contest the scheme under the Companies Act, 2013.
Unwilling to back down, the objectors escalated their case to the NCLAT—only to be met with rejection once again. With this ruling, ICICI Securities’ path to full integration under ICICI Bank remains clear.
