Delisting dilemma: evaluating the minority shareholder rights at ICICI Securities

Learning outcomes After working through the case and assignment questions, students will be able to understand the following aspects: To analyze the financial performance of ICICI Securities. (Bloom’s level: analyzing, evaluating) To evaluate whether the delisting offer to minority shareholders was justified. (Bloom’s level: evaluating) To critically examine the role of corporate governance in protecting minority shareholders. (Bloom’s level: creating) Case overview/synopsis This case study critically examines the listing and subsequent delisting of ICICI Securities, one of India’s largest brokerage firms and a subsidiary of ICICI Bank, a prominent private sector institution. The study explores the strategic rationale for the company’s initial public offering (IPO), the complexities involved in its pricing and the decision to delist just five years later. It contextualizes these corporate actions within the broader landscape of transformational shifts in India’s stockbroking industry, focusing on changes in business models and revenue streams.A central theme of the case is the response of investors and the multifaceted challenges in valuing the firm during the IPO as well as the delisting phases. The financial performance of ICICI Securities has been thoroughly analyzed, with particular attention to whether the delisting offer to minority shareholders was equitable. The study also interrogates the often-conflicting interests of institutional and retail investors, highlighting the role of corporate governance in safeguarding minority shareholder rights. The case explores whether the exchange offer given to minority shareholders, which was legally justified, is ethical as per the basic tenets of the theory of stakeholders’ wealth maximization. Complexity academic level This case is suitable for postgraduate-level courses on corporate finance, corporate governance, investment banking, financial markets, valuation and corporate restructuring. Participants can use the case to develop an understanding of the tools of financial statement analysis. This case can also be used in the executive education program for managers in the investment banking industry to understand the implications of pricing in IPO and delisting. Supplementary material Teaching notes are available for educators only. Subject code CSS1: Accounting and Finance.