ICICI Bank to maintain over 51 pc stake in all three of its listed entities: ED

Mumbai: The country’s second largest private sector lender ICICI Bank is aiming to maintain over 51 per cent stake in all three of its listed entities, a senior official said on Monday.

Its Executive Director Sandeep Batra said the bank is also committed to maintaining over 51 per cent stake in the IPO-bound ICICI Prudential Asset Management Company, and hence, it is upping stake by 2 percentage points before the entity hits the markets.

“We are committed to ensuring all our three listed entities remain our subsidiaries. So, our stake will remain at over 51 per cent,” Batra told reporters at a press conference here.

The mutual fund arm’s Managing Director and Chief Executive Nimesh Shah said that ICICI Bank will pick up the additional 2 per cent stake for the same price as the one which will be paid by other investors as part of its initial public offering.

Shah added that at present, the ICICI Bank ownership in the company is 51 per cent, which will go up to 53 per cent post the IPO, providing comfort to ensure that the holding is maintained above the 51 per cent mark.

Prudential owns 49 per cent at present, which will go down to 47 per cent after the sale to ICICI Bank and further to 37 per cent after the IPO, he said.

As per the current Sebi directive, Prudential has to reduce its holding in the company to 22 per cent by selling another 15 percentage points of the holding over the next five years, he added.

At present, 9 per cent of ICICI Prudential AMC’s overall AUM comes from its parent ICICI Bank’s network, he said.

Asked about the regulatory risk given that Sebi changes rules, especially ones governing fees very regularly causing some unease among investors, Shah said there is no risk but an opportunity.

The MF space is not one of maximising margins, but a case of volumes driving up the revenues.

Conceding that the cost structures at ICICI Prudential AMC are elevated, he asked everyone to look at the profits which the company is delivering and added that it is the most profitable asset manager in the country.

The profit market share for the company is 20 per cent as against a 13.3 per cent share in the overall assets under management, he added.

On the new entrants, especially those seeking to sell directly to investors rather than intermediaries, Shah appeared unfazed saying all new entrants have not been able to garner AUM and it is only those delivering performance who will be preferred by investors.

ICICI Prudential AMC has applied to launch a specialised investment fund as well and is looking to launch its offering in the next six months, he said.

The company’s acquisition of group company ICICI Venture’s businesses will help get access to the right talent to understand new age businesses better and also complete the product suite.

The PE business will become a part of the company as the fifth business unit, he added.