ICICI Securities (Delisted) CEO, MD, chairman, board of directors and AGM

Mutual fund votes, meeting of 16 Jul 2024, 23 fund houses

Each resolution counts the houses whose vote was matched to it; the rest are listed last.

• Re-appointment of Mr. Vijay Chandok (DIN: 01545262) as the Managing Director &nCEO of the Company and payment of remuneration

  ›Against Quantum Mutual Fund

  • Quantum Mutual FundManagement has failed to protect interest of minority investors.

  22 for1 against
• Appointment of Mr. T.K. Srirang (DIN: 10594104) as a Director of the Company

  ›Against Quantum Mutual Fund

  • Quantum Mutual FundManagement has failed to protect interest of minority investors.

  18 for1 against
• Appointment of Mr. T.K. Srirang (DIN: 10594104) as the Joint Managing Director ofnthe Company and payment of remuneration

  ›Against Quantum Mutual Fund

  • Quantum Mutual FundManagement has failed to protect interest of minority investors.

  18 for1 against

Mutual fund votes, meeting of 27 Mar 2024, 22 fund houses

• 1) Approve scheme of arrangement between the company and ICICI Bank Limited, its promoter

  1 for0 against
• Approve scheme of arrangement between the company and ICICI Bank Limited, its promoter

  3 for0 against
• Scheme of Arrangement amongst ICICI Bank Limited and ICICI Securities Limited and their respective shareholders under Section 230 and other applicable provisions of the Companies Act, 2013.

  ›Against Baroda BNP Paribas Mutual Fund, ITI Mutual Fund, Kotak Mahindra Mutual Fund, LIC Mutual Fund, Mahindra Manulife Mutual Fund, Quantum Mutual Fund, Samco Mutual Fund

  • Baroda BNP Paribas Mutual FundAs a practice of delisting, we expect reverse book building to be effective method. if the company had done reverse book building the price discovery would have been more transparent and fairer. Hence, we vote Against
  • ITI Mutual FundICICI Securities is engaged in the business of broking (institutional and retail) including allied services of extending margin trade finance and employee stock options finance, distribution of financial products, merchant banking and advisory services. It is a high cash flow generating company. The broking business, although dependant on macro indicators, is a structural play in the sense that retail and HNI participation in the equity markets is on a rise. We believe that the valuation of the company should be higher than what is reflected in the current market price. We believe that the fair way to discover the price at which a scrip can be delisted is through its discovery in a reverse bidding process. We believe that a static fair value decided by the promoter of the company may not reflect the fair potential of the stock price. Hence, we would vote against the resolution.
  • Kotak Mahindra Mutual FundAlthough the process of delisting ICICI Securities is legally compliant, we raise concern that ICICI Bank neither provided ICICI Securities minority shareholders an opportunity to participate in the price discovery process, nor an opportunity to stay invested in the business despite its subsequent unlisted status. It is proposed that ICICI Securities is merged with ICICI Bank at valuation lower than that of its peers and also its valuations at the time of IPO. The Company has grown considerably since its listing on almost all important parameters such as customer base, market share and profitability. The long term outlook for the company s business also remains bright. Therefore, we believe that the proposed merger ratio is adverse to the shareholders of the company.
  • LIC Mutual FundICICI Sec is presently trading at a discount compared to its closest competitor. Since the valuation study conducted by the company for delisting in June 2023, both the business environment and the company's performance have improved. In Q3FY24, the reported PAT increased by 65%, indicating improved business fundamentals. We believe the current swap ratio is unfavorable to minority shareholders. Therefore, we recommend voting against the resolution
  • Mahindra Manulife Mutual FundConsidering the business model of ICICI Securities being driven by higher fees revenues and lower capital needs, potential for retail brokerage and wealth management business in India, the merger ratio could have been better in favor of ICICI Securities shareholders .
  • Quantum Mutual FundWe Recommend voting Against the resolution for merger of ICICI securities with ICICI Bank.The merger ratio significantly undervalues ICICI securities relative to peers and is detrimental for minority shareholders of ICICI securities. We believe the company can generate signficant long term value and the current merger ratio does not capture the same. Recommend you vote ‘Against’ the resolution. For the detailed rationale pls refer the attached note. https://www.quantumamc.com/FileCDN/Downloads/pdfs/2024/Rational-For-Vote-ISEC-Merger-with-ICICI-Bank.pdf
  • Samco Mutual FundThe proposal to approve the Scheme of Arrangement amongst ICICI Bank Limited and ICICI Securities Limited and their respective shareholders under Section 230 and other applicable provisions of the Companies Act, 2013 should not be approved for the following aforementioned reasons: 1. Valuation: During the Initial Public Offering period, ICICI Securities Limited was introduced to investors at a price representing approximately 35 times the price-to-earnings multiple. However, the current valuation multiple proposed during the delisting period appears comparatively lower, despite the Indian equity markets demonstrating maturity and efficiency, coupled with relatively higher investor participation. 2. Unfair Share Swap proposal: The proposed share swap proposal presents inherent inequity, as it restricts shareholders from retaining ownership of the business they originally invested in. Furthermore, the disparity in the developmental stages between ICICI Bank, which stands in a mature phase of its existence and ICICI Securities, which is positioned in a growth phase exacerbates the unfair treatment towards minority shareholders. 3. Opportunity Cost: Shareholders face a significant opportunity cost in forfeiting the value discovery process of the company. This loss arises from the rich future prospects and strengthened franchise of ICICI Securities, driven by the expansion of the Indian equity markets and growing participation from both domestic and international investors. 4. Strong Franchise: Since its Initial Public Offering (IPO), ICICI Securities has exhibited robust growth, reflected in improved financial metrics and a strengthened balance sheet. Moreover, it has gained significant market share in the past few years. Presently, the business stands poised to deliver sustained and substantial growth, capitalizing on its inherent strengths and the smoothening of cyclicality within the equity markets. However, the minority investors are not provided with a fair proposal which would allow them to participate in this incremental future growth. As the proposal fails to align with the interests of minority shareholders, it should not be approved.

  10 for7 against

Mutual fund votes, meeting of 5 Dec 2023, 15 fund houses

Each resolution counts the houses whose vote was matched to it; the rest are listed last.

• Enhancement of the existing borrowing limit under Section 180 of the Companies Act, 2013

  1 for0 against
• Enhancement of the existing limit under Section 186 of the Companies Act, 2013

  1 for0 against

Mutual fund votes, meeting of 29 Aug 2023, 14 fund houses

Each resolution counts the houses whose vote was matched to it; the rest are listed last.

• To receive, consider and adopt the Standalone Audited Financial Statements of the Company for the financial year ended March 31, 2023 together with the Reports of the Board of Directors and the Auditors thereon.MoreLess

  13 for0 against
• To receive, consider and adopt the Consolidated Audited Financial Statements of the Company for the financial year ended March 31, 2023 together with the Report of the Auditors thereon.

  ›Against Motilal Oswal Mutual Fund

  • Motilal Oswal Mutual FundUnqualified financial statements. Compliant with Indian Accounting Standards. Non-Compliant with Companies Act, 2013 & SEBI LODR Regulations: Non-disclosure of financial statements of Subsidiaries for FY 2022-23.

  12 for1 against
• To confirm the payment of interim dividend and declare final dividend on equity shares for the financial year ended March 31, 2023.

  13 for0 against
• Appointment of Mr. Prasanna Balachander (DIN: 02257744), who retires by rotation and being eligible, offers himself for re-appointment.

  14 for0 against
• Revision in remuneration payable to Mr. Vijay Chandok (DIN: 01545262), the Managing Director & CEO of the Company.

  ›Against Axis Mutual Fund, Sundaram Mutual Fund

  • Axis Mutual Fund, Sundaram Mutual FundVijay Chandok’s remuneration is being revised largely for the grant of stock options. His FY23 remuneration aggregated Rs.149.4 mn inclusive of fair value of stock option grants ~46.8%. In April 2023, Vijay Chandok was granted 567,050 stock options, which was more than 0.1% of ICICI Securities’ issued shares. His proposed remuneration for FY24 is estimated at Rs. 257.7 mn, which includes the fair value of options granted, ~65.2%. We note, the quantum of stock options granted to him in FY24, is 78.8% higher than FY23, though profitability dipped from to Rs. 11.2 bn from Rs. 13.8bn. His remuneration is not comparable with peers and is high for the size of the business. The board must provide clarity with respect to the basis of the stock option grants, especially in the context of the company’s muted performance.

  11 for2 against
• Revision in remuneration payable to Mr. Ajay Saraf (DIN: 00074885), the Executive Director of the Company.

  ›Against Axis Mutual Fund, Sundaram Mutual Fund

  • Axis Mutual Fund, Sundaram Mutual FundAjay Saraf, 53, is an Executive Director on the board of ICICI Securities and heads the investment banking and institutional broking divisions. He has been a director on the board of ICICI Securities since May 2011. His FY23 remuneration (inclusive of fair value of stock option grants) aggregated Rs. 60.3 mn. His revised remuneration is estimated at Rs. 95.6 mn, of which fair value of stock options comprise ~50% of total pay. We note, the quantum of stock options granted to him in FY24, is 73.5% higher than FY23, though profitability dipped from to Rs. 11.2 bn from Rs. 13.8 bn. His remuneration is not comparable with peers and high for the size of the business. The board must provide clarity with respect to the basis of the stock option grants, especially in the context of the company’s muted performance.

  11 for2 against
• Increase in payment of profit related commission to be paid to the Chairperson of the Board from FY2024 onwards.

  ›Against Axis Mutual Fund, Nippon India Mutual Fund, Sundaram Mutual Fund, Taurus Mutual Fund

  • Axis Mutual FundThe company seeks approval for an increase in commission payable to the Chairperson of the board from Rs. 1.0 mn to Rs. 2.0 mn, from the financial year ending 31 March 2024 onwards, in proportion to his/her tenure in the company during the relevant financial year. The proposed commission to Chairperson, though capped, is in line with market practices and statutory requirements. However, we are unable to support the resolution as the company has not defined a specific tenure for the proposed commission and thus the resolution is valid in perpetuity. We believe shareholders must get a chance to periodically review such payments
  • Nippon India Mutual FundPerpetual approval, hence not approved
  • Sundaram Mutual Fund, Taurus Mutual FundThe company seeks approval for an increase in commission payable to the Chairperson of the board from Rs. 1.0 mn to Rs. 2.0 mn, from the financial year ending 31 March 2024 onwards, in proportion to his/her tenure in the company during the relevant financial year. The proposed commission to Chairperson, though capped, is in line with market practices and statutory requirements. However, we are unable to support the resolution as the company has not defined a specific tenure for the proposed commission and thus the resolution is valid in perpetuity. We believe shareholders must get a chance to periodically review such payments.

  10 for4 against
• Material related party transaction(s) for credit facilities.

  14 for0 against
• Material related party transaction(s) for placing of deposits.

  13 for0 against

Mutual fund votes, meeting of 18 Dec 2022, 14 fund houses

• Appointment of Mr. Rakesh Jha (DIN: 00042075) as a Non-Executive Non-Independent Director of the Company

  14 for0 against

Mutual fund votes, meeting of 26 Aug 2022, 13 fund houses

Each resolution counts the houses whose vote was matched to it; the rest are listed last.

• To receive, consider and adopt the Standalone Audited Financial Statements of the Company for the financial year ended March 31, 2022 together with the Reports of the Board of Directors and the Auditors thereon .MoreLess

  13 for0 against
• To receive, consider and adopt the Consolidated Audited Financial Statements of the Company for the financial year ended March 31, 2022 together with the Report of the Auditors thereon.

  13 for0 against
• To confirm the payment of interim dividend and declare final dividend on equity shares for the financial year ended March 31, 2022.

  13 for0 against
• Appointment of Mr. Ajay Saraf (DIN: 00074885), who retires by rotation and being eligible, offers himself for re-appointment.

  13 for0 against
• Re-appointment of B S R & Co. LLP, Chartered Accountants, as the Statutory Auditors of the Company.

  13 for0 against
• Revision in remuneration payable to Mr. Vijay Chandok (DIN: 01545262), the Managing Director & CEO of the Company.

  13 for0 against
• Revision in remuneration payable to Mr. Ajay Saraf (DIN: 00074885), the Executive Director of the Company.

  13 for0 against
• Re-appointment of Mr. Subrata Mukherji (DIN: 00057492) as an Independent Director of the Company.

  ›Against LIC Mutual Fund, Quantum Mutual Fund

  • LIC Mutual FundCompliant with law. Governance Concern: Prolonged Association, Ex-employee of the Company/Group
  • Quantum Mutual FundWe recommend not to classify him as an independent director since he is ex-employee of the Company.

  11 for2 against
• Re-appointment of Ms. Vijayalakshmi Iyer (DIN: 05242960) as an Independent Director of the Company.

  13 for0 against
• Appointment of Dr. Gopichand Katragadda (DIN: 02475721) as an Independent Director of the Company.

  13 for0 against
• Appointment of Mr. Prasanna Balachander (DIN: 02257744) as a Non-Executive Non-Independent Director of the Company.

  13 for0 against
• Enhancement of the existing borrowing limit under Section 180 of the Companies Act, 2013.

  2 for0 against
• Enhancement of the existing limit under Section 186 of the Companies Act, 2013.

  9 for0 against
• Material related party transaction(s) for credit facilities.

  13 for0 against
• Material related party transaction(s) for placing of deposits.

  13 for0 against
• Approval and adoption of ‘ICICI Securities Limited - Employees Stock Unit Scheme - 2022’.

  ›Against Franklin Templeton Mutual Fund

  • Franklin Templeton Mutual FundA vote AGAINST this resolution is warranted because: • The scheme permits stock options to be issued with an exercise price at a deep discount to the market price, as on grant date. • The exact performance targets for vesting of stock options or performance stock units have not been disclosed.

  12 for1 against
• Approval of grant of Units to the eligible employees of Subsidiaries of the Company under ‘ICICI Securities Limited - Employees Stock Unit Scheme - 2022’.

  ›Against Franklin Templeton Mutual Fund

  • Franklin Templeton Mutual FundA vote AGAINST this resolution is warranted because: • The scheme permits stock options to be issued with an exercise price at a deep discount to the market price, as on grant date. • The exact performance targets for vesting of stock options or performance stock units have not been disclosed.

  12 for1 against