ICICI Securities obtains approval for IPO
ICICI Securities, 100 per cent subsidiary of ICICI Bank, has received SEBI's approval to raise an estimated amount of Rs. 3,000-Rs 4,000 crore through an initial public offering (IPO). This public issue comprises of 64,428,280 equity shares, amounting to 20 per cent stake by ICICI Bank.
The offer contains an arrangement of up to 32.21 lakh shares for individual as well as Hindu Undivided Family (HUF) shareholders of ICICI Bank.
ICICI Securities, India’s largest retail broker, has tripled its ROE over FY13-H1FY18, i.e. from 35 per cent to 98 per cent. Also, it has posted robust revenue CAGR of ~15 per cent over FY13-17. Its EBITDA margins have jumped significantly from 22 per cent in FY13 to 40 per cent in FY17. However, some hurdles may arise due to increasing online competition in distribution and regulatory changes.
ICICI Securities started as a stockbroker and then ventured into online stockbroking from year 2000 onwards and then expanded into MF distribution in 2001. It is one of the largest stockbrokers (~9 per cent of the brokerage volume share) and MF distributors in the country (1.2 per cent share in MF industry AUM).
During H1FY18, the company's revenue mix comprises of Brokerage income (58 per cent), Distribution business (25 per cent), Investment banking (9 per cent) and remaining from other interest income.