ICICI Sec seeks Sebi nod to manage own IPO
The first time an Indian investment bank is considering handling its own share sale
Domestic broking and investment banking major ICICI Securities has sought the Securities and Exchange Board of India’s (Sebi’s) permission to manage its own share sale. This is the first time an investment bank is considering managing its own initial public offering, said industry players. SAMIE MODAK reports
Domestic broking and investment banking major ICICI Securities has sought the Securities and Exchange Board of India’s (Sebi’s) permission to manage its own share sale. This is the first time an investment bank is considering managing its own initial public offering (IPO), said industry players.
Sources said the capital markets regulator was currently looking at the “unique request” and might revert in a few weeks.
“There is no such precedence. Sebi will check if allowing ICICI Securities to handle its own IPO will result in any conflict of interest. If the regulator is convinced that it will not put at risk the interests of public shareholders, it may give its nod,” said a legal expert.
ICICI Securities, an arm of private sector ICICI Bank, has already set in motion the plan to launch an IPO, which could value the firm at ~25,000 crore.
Sources close to Sebi said the regulator might not allow ICICI Securities to conduct its own due diligence, but might let it act as a co-book running lead manager only for the purpose of marketing the IPO. Prudential Life. However,
An investment bank’s functions they were still group firms. In include conducting due this case, it is handling its own diligence of the IPO-bound IPO. The regulator might want company, coordinating with to take a careful look at this Sebi for approvals, setting the issue,” said a legal expert. price and conducting roadshows An email sent to ICICI to attract investors. Securities on the issue went
In similar instances, Sebi unanswered. had allowed ICICI Securities Last week, Bloomberg to work on the IPOs of affiliate reported ICICI Securities had companies ICICI Lombard hired Bank of America Merrill and ICICI Prudential Life. Lynch, Citigroup, Citic CLSA, However, there too, the due Edelweiss, and IIFL Holdings for diligence work was assigned its ~2,000-~3,000 crore IPO. to other non-related investment Sebi’s nod will allow ICICI banks. Securities to add its own name to
“Sebi had allowed ICICI the list. It is typical for six to eight Securities to take up the mandate banks of to ICICI offer Lombard on a single and IPO. ICICI
ICICI Securities could be keen on marketing its own IPO to leverage its institutional and retail investor base. The investment bank is one of the major players when it comes to domestic equity fundraising. According to Bloomberg IPO league table data, ICICI Securities is ranked fifth this year having handled eight issues. Last year, it was ranked second having bagged 11 IPOs.
Industry players say globally it is a common practice for investment banks to work on their own share sales. Earlier this year, Deutsche Bank was one of the banks for its $8.6billion rights offering.