ICICI Bank owns several companies that are listed on the stock market. The bank wants to keep at least 51% ownership in all three of these companies. A senior official, Sandeep Batra, said the bank plans to always hold more than 51% ownership in its three listed companies. This ensures they remain subsidiaries (companies controlled by ICICI Bank) and remains the majority owner and can continue to control important decisions.
One of these companies, ICICI Prudential Asset Management Company (AMC), is planning to launch a special investment fund sometime in the next six months. The company is also preparing for an IPO (Initial Public Offering), which means it will sell shares to the public.
Currently ICICI Bank owns 51% and Prudential owns 49%. Before the IPO, ICICI Bank will buy 2% more, increasing its share to 53%. As a result, Prudential’s share will fall to 47%. After the IPO takes place, Prudential’s stake will drop further to around 37%. Also, according to SEBI rules, Prudential must slowly bring down its share to 22% within five years. This means it will have to keep reducing its stake step by step to follow the regulations.
Other Key Points:
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Only 9% of ICICI Prudential AMC’s total money comes through ICICI Bank branches, which means they are not too dependent on the bank for business.
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The AMC’s CEO, Nimesh Shah, said that SEBI’s frequent rule changes are not a problem. He believes they are actually an opportunity because mutual funds grow by bringing in more investors, not by charging higher fees.
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He admitted that their costs are high, but their profits are even higher. In fact, ICICI Prudential AMC is the most profitable asset management company in India.
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Their share of total industry profits is 20%, even though their share of all industry assets is only 13.3%. This shows they earn more efficiently than competitors.
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They are not worried about new companies entering the mutual fund market because only those who provide strong performance can grow—and they believe they can continue to do that.
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The AMC plans to launch a new specialised investment fund within the next six months.
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They are also taking over ICICI Venture’s private equity business, which will help them grow their knowledge and offer a wider range of investment products to customers.
ICICI Bank is increasing its ownership in its asset management subsidiary to keep control after the IPO. The AMC says it is profitable, confident about competition, and planning to grow with new products and business units.