ICICI Securities (I-Sec), the broking and investment banking arm of ICICI Bank, is set to hit the market in six months. The boards of I-Sec and its parent have approved issue of shares up to 15 per cent of the post-issue paid up capital through initial public offering and pre-issue private placement.
"Before the issue hits the market, we want to split the shares of Rs 10 each at present into five shares of Rs 2 each. We also want to issue at least 2-3 per cent (pre-issue) of the shares on private placement," S Mukherji, managing director and CEO of I-Sec, told
after the board meeting.
Though Mukherji did not want to share the project outlay required for expansion of its various activities, for which the proceeds of the IPO will be used, he said that funds would basically be used for expansion of physical branches from the present over 300, upgradation of infotech backbone which is its online stock broking arm – ICICI Direct, also the largest in the country.
"A part of the fund raised will also be utilised to develop infrastructure for entry into fund-based businesses like margin funding, issue/sale of securities, investment in equities and debt through proprietary book," Mukherji added.
I-Sec is already into retail broking, institutional broking, distribution of retail products, wealth management, and investment banking and advisory services.
The present paid-up capital of I-Sec is approximately at Rs 61 crore. Thus, 10 per cent of the split capital base would amount to 4,57,50,000 shares of Rs 2 to be on offer through IPO, while "the remaining 5 per cent will be issued through private placement," Mukherji said.
I-Sec had garnered revenues of Rs 257 crore in the October-December 2007 quarter and Rs 527 crore during the first months of the fiscal.
The company's profit after tax for the quarter and the first nine months were at Rs 79 crore and Rs 108 crore respectively.
ICICI Bank, which is the 100 per cent owner of I-Sec now, will be holding 85 per cent stake after the IPO.