ICICI Prudential MF to seek clarity from SEBI on its ICICI Securities IPO order

Surabhi Mumbai | Updated on July 08, 2018 Published on July 08, 2018

ICICI Prudential Mutual Fund may approach the Securities and Exchange Board of India (SEBI) to seek clarity on the rules under which the market regulator has advised it to return money invested on the last day of the initial public offer of ICICI Securities.

In March, ICICI Securities had launched its initial public offering of 7.72 crore equity shares at a price band of ₹519-520 apiece, looking to raise a little over ₹4,000 crore. ICICI Prudential MF applied for and was allotted about 1.23 crore shares with an investment of ₹640 crore under five of its schemes. However, of this, ₹400 crore was applied for on the first day of the IPO and the balance ₹240 crore on the last day.

SEBI reckons that the investment made by ICICI Pru on the last day was only to save the ICICI Securities IPO and may have been against the interest of the investors of the mutual fund arm.

SEBI had last week asked the asset manager to refund ₹240 crore, along with 15 per cent interest, to its five schemes from which the money was taken to invest in the IPO of ICICI Securities.

“The recent advice by SEBI has been given in its wisdom but it seems that there is no precedent or clear rule under which the letter was sent. There is a view that clarity is needed on the issue from the regulator,” said a person familiar with the development.

SEBI Chairman Ajay Tyagi had in June said that the regulator is looking into whether there was any violation in the code of ethics in the IPO. ICICI declined to comment.

However, industry sources said that it was felt that in the past, subsidiaries of other companies had also made similar investments in sister concerns but did not attract such attention from SEBI. ICICI Pru AMC is expected to send its response to the market regulator soon.

According to data with the BSE, while ICICI Bank as the promoter holds 79.22 per cent stake in ICICI Securities, ICICI Prudential Value Fund Series 19 is the largest public shareholder in the company with 3.82 per cent stake.

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Published on July 08, 2018
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