Shares of ICICI Securities will be on focus on Monday morning after the domestic brokerage informed stock exchange that the company board would consider delisting its shares in a meeting on June 29, Thursday. The brokerage is promoter by ICICI Bank. The private lender owned 24,16,52,692 shares, or 74.85 per cent stake, in the broking firm as on March 31.
Foreign institutional investors owned 8.65 per cent stake in the broking firm, insurance companies 3.14 per cent and mutual funds 1.03 per cent. Small investors that owned up to Rs 2 lakh worth ICICI Securities shares account for 7.69 per cent stake in the company.
Shares of ICICI Securities closed at Rs 563.80 on Friday, up 7.14 per cent. The announcement on the board meet came on Sunday night.
Analysts noted that ICICI Securities has seen tough times in the recent past due to high linkage of its revenue to broader equity markets. This has translated into a sharp decline in broking revenue as its dependence on cash volumes has been relatively higher, Motilal Oswal suggested.
That said, there was stability in the past couple of quarters. The primary issuances have been on weak footing amid a volatile equity market, Motilal Oswal Securities said in April.
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"ICICI Securities is now on the course of diversifying its revenue with the launch of several tools and products for the derivatives segment. Besides, the company has intensified its focus on increasing the penetration of MTF among its customers. The launch of new distribution products – loans and general insurance – will further enhance revenue in due course. On the cost front, ICICI Securities will continue to invest in human resources and technology," it said.
For the March quarter, ICICI Securities' retail broking revenue declined 19 per cent YoY to about Rs 260 crore. However, its retail cash segment market share improved 105 bps YoY to 11 per cent, while derivatives segment market share expanded 32 bps YoY to 3.6 per cent, Motilal Oswal Securities suggested in an April note.
The company has tied up with Tata Capital for LAS and personal loans. The effect of the partnership is expected in June quarter results.
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