ICICI Bank to Raise Two Percent Stake in ICICI Prudential Asset Management Company
The board of ICICI Bank approved the acquisition of a two percent share in ICICI Prudential Asset Management Company, the bank's asset management division.
The share price of ICICI Bank was up more than one percent and on the BSE, the banking stock increased by as much as 1.06 percent to Rs.1,454.60 per share.
In a regulatory statement on June 27, ICICI Bank stated that the bank's board of directors had authorized the purchase of an additional two percent stake in the ICICI Prudential Asset Management Company.
According to the statement, the main goal of this stake purchase in ICICI Prudential Asset Management firm is to preserve the bank's majority ownership in the event that the firm grants stock-based compensation.
Even though its joint venture partner intends to IPO and partially sell its position in the fund house, ICICI Bank declared in February that it would keep the majority of its shares in ICICI Prudential Asset Management Company.
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The UK-based Prudential PLC, ICICI Bank's joint venture partner, owns 49 percent of the company, while ICICI Bank owns 51 percent of ICICI Prudential Asset Management Company.
“The voting rights by the registered ADS holder would be subject to it demonstrating that its holdings are in conformity with Section 12B of the Banking Regulation Act, 1949 read with applicable Master Direction & Guidelines, as amended from time to time,” the private lender said.
The board also approved a change to the ICICI Bank ADR Deposit Agreement that will give registered American Depository Shares (ADS) holders voting rights over the deposited securities, pending RBI clearance.
The share price of ICICI Bank has gained nine percent over the last three months, but has stayed mostly unchanged over the past month. The banking stock has increased 13 percent year-to-date (YTD) and 19 percent over the last 12 months.
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The share price of ICICI Bank has shown impressive returns over the longer run, rising 102 percent in three years and achieving multibagger gains of 316 percent in the previous five.