The country’s top broker Zerodha has over 20 percent market share. ICICI Securities currently has 7 percent market share of active National Stock Exchange clients. Near-term headwind is expected to persist for ICICI Securities given that it continues to derive a large part of its revenue from the cyclical broking business as well as due to moderation in client additions and lower active customers, according to a report from Axis Securities. Moreover, a dividend yield of 4-5 percent was another reason to hold on to the stock.ĭespite the revenue diversification, the outlook for the broking industry is bleak. “The company is flexible in changing according to the evolving times and inventing and innovating products to protect from competition,” Chirag Maroo, research analyst, Keynote Capital, wrote in a note dated June 30.Īs the segments of private wealth management and loan and insurance distribution grew, investors were perhaps hoping for the stock to rally.
The share of distribution business revenue has jumped from 19 percent to 22 percent in a year.Īccording to some analysts, these are encouraging signs. As of March end, the company was sitting on cash and cash equivalents of Rs 6,790 crore.ĭerivative broking revenue has now been increasing for the past seven quarters and currently stands at about 15 percent of the total revenue stack. The optimism has come largely on the back of revenue diversification and strong cash generation. It currently stands at 7.67 percent, up from 4 percent a few years back. In fact, retail shareholding has only inched up. For IPO investors who still hold the stock, the needle has not moved much. Since then, the stock has cooled off significantly and so has the activity in equity markets. It surged to Rs 870 in October 2021, during the retail frenzy in stock markets. Check out share swap ratioīack in 2018, the issue price at the time of the ICICI Securities initial public offering (IPO) was Rs 520. They are taking the minority shareholders for a ride,” wrote one, while another has demanded a 100 percent premium at Rs 1,200 for a stock trading at Rs 600 currently.Īlso Read: ICICI Sec to become wholly-owned subsidiary of ICICI Bank.
“ICICI Bank has undervalued a company as strong as ICICI Sec. Some retail shareholders have taken to Twitter to express their resentment. Based on June 28 closing price, the share swap ratio indicates that ICICI Securities' shareholders are getting only a 2 percent premium, if one ignores the initial 10 percent pop. Instead of a cash payout, shareholders of ICICI Securities will be allotted 67 equity shares of ICICI Bank for every 100 equity shares of the broking house. This was on the back of expectation of a generous premium which, sadly for the shareholders, has not come through. When ICICI Bank proposed to delist ICICI Securities on June 26, the share price of the latter rallied over 10 percent that day.
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