ICICI Securities IPO under Sebi lens
ICICI SECURITIES HAD TO CUT ITS IPO SIZE TO ₹3,520 CRORE FROM THE ORIGINAL TARGET OF ₹4,017 CRORE
The stock market regulator has sought details of a large investment made by ICICI Prudential Mutual Fund in the flop IPO of affiliate ICICI Securities Ltd, two people aware of the matter said.
ICICI Securities had to cut its IPO size to ₹3,520 crore from the original target of ₹4,017 crore because of poor investor interest. Of this, a large chunk was bought by ICICI MF. “Queries have been sent to exchanges, merchant bankers and Registrar and Transfer Agents. This is based on the concern that a related party, ICICI MF, has taken a massive exposure to ICICI Securities during its IPO,” said one of the two people cited above. Both declined to be identified.
The queries were sent last week, said the second person, adding that “exchanges are compiling the data and would be responding to the regulator’s queries this week”. Cogencis first reported on April 13 that ICICI Prudential was the largest buyer in the ICICI Securities share sale.
ICICI Securities and a spokesperson for BSE declined to comment. Emails sent to Sebi and NSE were not answered till press time.
To be sure, ICICI MF’s investment in ICICI Securities is in line with Sebi regulations and the asset management company’s investment mandate. However, Sebi can initiate an investigation to ascertain if the fund house is in violation of the model code of conduct prescribed in Sebi’s norms for mutual funds.
In an emailed response, an ICICI MF spokesperson said, “All our investments are carried out in line with the regulatory guidelines and established processes. The quantum of our investments that has been made in the IPO is in line with investments made in other primary issues where we have invested.”
ICICI MF is ICICI Securities’ largest public shareholder with 3.82% stake, according to the firm’s shareholding pattern on BSE. Other major public shareholders are HDFC Mutual Fund at 1.19% and Reliance Mutual Fund at 1.04%.