ICICI Pru MF is top pub­lic share­holder in ICICI Sec

Business Standard - - THE SMART INVESTOR - SAMIE MODAK

ICICI Pru­den­tial Mu­tual Fund (MF) has emerged as the largest pub­lic share­holder in sis­ter con­cern, ICICI Se­cu­ri­ties, which de­buted ear­lier this month.

The coun­try’s largest as­set man­ager in­vested ~6 bil­lion, nearly a fifth of the is­sue size, in the group com­pany’s ini­tial pub­lic of­fer­ing (IPO), which had gar­nered 78 per cent sub­scrip­tion. Through the maiden of­fer, par­ent ICICI Bank was look­ing to di­vest a 24 per cent stake for ~40 bil­lion. How­ever, the pri­vate lender could di­vest only a 20.8 per cent stake due to lack of de­mand and raised ~35 bil­lion.

Ac­cord­ing to share­hold­ing data of ICICI Se­cu­ri­ties, ICICI Pru­den­tial MF is the largest pub­lic share­holder with a 3.58 per cent stake, fol­lowed by HDFC MF which holds 1.2 per cent, and Reliance MF which holds slightly above 1 per cent. All top pub­lic share­hold­ers of ICICI Se­cu­ri­ties are mu­tual funds. Most fund houses had in­vested in the an­chor por­tion of the pub­lic of­fer. ICICI Pru­den­tial MF, be­ing part of the same group, was not el­i­gi­ble for that seg­ment and had to ap­ply in the qual­i­fied in­sti­tu­tional buyer (QIB) por­tion.

The QIB por­tion of ICICI Se­cu­ri­ties’ of­fer sub­scribed one time, the min­i­mum re­quired for the is­sue to go through. To­tal 22.95 mil­lion shares were avail­able in the QIB seg­ment. ICICI Pru­den­tial MF sub­scribed for 11.54 mil­lion, nearly 50 per cent of the shares meant for in­sti­tu­tional in­vestors.

“All our in­vest­ments are car­ried out in line with reg­u­la­tory guide­lines and es­tab­lished pro­cesses. The amount of our in­vest­ments that has been made in the IPO is in line with those made in other pri­mary is­sues where we have in­vested,” said a spokesper­son at ICICI Pru­den­tial MF on if the in­vest­ment amounts to con­flict of in­ter­est. Af­ter list­ing, shares of ICICI Se­cu­ri­ties had lost nearly a quar­ter of their value. The stock made up for a part of the losses on the back of en­cour­ag­ing March quar­ter re­sults. On Mon­day, the scrip ended 1.6 per cent higher at ~429.3, still 17.4 per cent be­low the IPO price of ~520. ICICI Pru­den­tial MF has been an ac­tive in­vestor in most of the IPOs that have hit the mar­ket in the past two years. The fund house had also in­vested in two other group com­pa­nies — ICICI Pru­den­tial Life and ICICI Pru­den­tial Lom­bard — and other of­fers, in­clud­ing that of SBI Life and HDFC Life.

ICICI Pru­den­tial AMC ap­plied for ICICI Se­cu­ri­ties’ shares through at least four of its schemes. For three of these, the in­vest­ment is less than 1 per cent of their to­tal cor­pus. For one scheme, ICICI Pru­den­tial Value Fund Se­ries 19, the in­vest­ment is 2.28 per cent of its port­fo­lio. Only two other schemes, Edel­weiss Long Term Eq­uity Fund and Reliance Mid & Small Cap, have ac­corded higher weight to ICICI Se­cu­ri­ties in their port­fo­lios.

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