Norway’s Norges Bank Investment Management, the world’s biggest sovereign wealth fund, has stamped its approval on ICICI Bank Ltd’s proposal to delist and merge the brokerage business with itself, thereby giving a shot in the arm for the Bank to make ICICI Securities Ltd its wholly-owned subsidiary.
On Friday, Norges Bank Investment Management, which is the single-largest public shareholder in ICICI Securities, voted in favour of the resolution, according to a filing reviewed by Mint.
Norway’s $1.55 trillion sovereign wealth fund is an influential voice in deciding the outcome of whether ICICI Securities would continue as a standalone listed business entity, as it owns 3.2%.
Both ICICI Bank and ICICI Securities have sought shareholder approval on the bank’s decision to delist the brokerage business. The voting on the resolution ends on Wednesday, 27 March.
Parent ICICI Bank owns a 74.85% stake in the company, with the remaining 25.23% held by public shareholders. Two-thirds, or 16.8%, of public shareholders of ICICI Securities need to approve the proposal.
After Norges’s approval, parent ICICI Bank needs a nod from 13.6% of 22.23% public shareholders of ICICI Securities.
Life Insurance Corp. of India, the second-largest public shareholder, owns 2.58%. Boston-based Fidelity, a large money manager managing over $10 trillion in assets under management, owns 1.29%, and California-headquartered Capital Group, which has $2.6 trillion in assets under management, owns 1.26%.
Another investor, California Public Employees’ Retirement System (CalPERS), which has about $500 billion of assets under management, has rejected the proposal, according to a filing made by the money manager. Mint independently could not ascertain the ownership of CalPERS in ICICI Securities.
Investors like CalPERS and many retail shareholders, who together own 5.86% in the brokerage business, are unhappy with ICICI Bank’s proposed share swap ratio (67 shares of ICICI Bank for every 100 shares held in ICICI Securities) for delisting ICICI Securities.
Earlier this month, two proxy advisory firms including InGovern and Stakeholders Empowerment Services (SES) recommended to shareholders to approve the transaction even as some minority individual shareholders continue to oppose this decision, unhappy over the proposed share swap ratio.
Since ICICI Bank first made its proposal public in June last year, some retail investors have come together, expressing their displeasure to the boards of both the bank and the brokerage, and even tried to rally other investors to oppose the proposal.
At least half a dozen mutual funds, who together owned 2.21% in the brokerage business, bought more shares in February, even as shares of ICICI Securities traded at a premium to the swap ratio, according to an earlier Mint piece. Some market observers argued that this suggests that Mutual Fund would reject the proposal and the delisting proposal could fall through.
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Published: 24 Mar 2024, 12:54 PM IST