Securities Exchange Board of India (SEBI), the capital markets regulator, has asked ICICI Prudential Mutual Fund to return Rs 240 crore, along with 15 per cent interest, to its five schemes as the money was used in violation of rules during the last bidding day of ICICI Securities, which is its group company. For investors who have redeemed their units since the allotment of shares, the regulator has asked to pay them after working out the loss caused due to a decline in the share price of ICICI Securities. Also Read - HCC raises over Rs 497 cr from rights issue
ICICI Securities brought out an Initial Public Offering (IPO) in March for 77,249,508 shares, with a price band of Rs 519- 520. The plan was to raise up to Rs 4,016 crore but it received the sluggish response till the last day of the bidding. Without the last day subscription by ICICI Prudential MF, ICICI Securities’ IPO would have failed and the fund house has thus facilitated its sponsor ICICI Bank to divest its stake in the brokerage house, the SEBI letter said. Also Read - Shyam Metalics gets Sebi's go-ahead for Rs 900-cr IPO
After the sluggish response from investors, particularly, high net worth individuals the company reduced the size of the offer to a little over Rs 3,500 crore. The IPO received support from ICICI Prudential MF under five of its schemes — ICICI Prudential Balanced Advantage Fund, ICICI Prudential Balanced Fund, ICICI Prudential Banking and Financial Services Fund, ICICI Prudential Focused Bluechip Equity Fund and ICICI Prudential Value Fund Series 19. The mutual fund arm of the group company applied for and was allotted 123.08 lakh shares at a price of Rs 520 apiece, totalling Rs 640 crore in the QIB category. Out of the application for shares worth Rs 640 crore, Rs 400 crore was applied on the first day of bidding and Rs 240 crore was applied on the last day. Also Read - PFC not to make open offer post REC acquisition
It is due to the subscription by ICICI MF on the last day that the IPO was pulled off, aswithout it the total qualified institutional buyer (QIB) subscription would have been just 70.11 per cent as against the requirement of the 75 per cent for the issue to be successful.
(With PTI Inputs)