ICICI Securities IPO Review, Should You Invest?

ICICI Securities Ltd. has planned to open Initial public offering (IPO) of 77,249,508 equity shares of face value Rs. 5 each on Thursday, 22^nd March 2018. The price band of ICICI Securities IPO is Rs. 519-Rs. 520 per equity share. Minimum order quantity can be made of 28 shares and in multiples of 28 equity share thereafter.  ICICI Securities IPO is proposed to be listed on NSE and BSE.

ICICI Securities Business Profile

ICICI Securities Ltd. which is a part of ICICI group, established in year 1995. The Company is headquartered in Mumbai, and operates offices in India, United States, Oman and Singapore. ICICI Securities is engaged in a wide range of financial services which includes brokerage, investment banking and financial product distribution. It focuses on both retail and institutional clients.

Product and services offered to retail clients include: Equities, derivatives, research. Also includes third party product distribution like fixed deposit, mutual fund, loan, pension products etc. It operates through online platform ICICIdirect.com.

Key dates of ICICI Securities IPO

• Issue closing date: 26^thMarch, 2018
• Net offer: 7,33,87,033Equity Shares
• ICICI Bank shareholders (reserved): 38,62,475 Equity Shares
• Retail portion: 10%
• Issue constitutes: 23.98%
• Finalization of basis of allotment: On or before 2^nd April 2018
• Initiation of refunds: On or before 3rd April 2018
• Credit of equity shares: On or before 4^thApril 2018
• Listing date: On or before 5^thApril 2018

Purpose of ICICI Securities IPO

Company is not going to receive any proceeds from the offer for sale by the selling shareholders, However:

• The Company will get benefit of listing equity shares in stock exchange.
• Listing will help the company to enhance its visibility and brand image, and at the same time it will provide liquidity to its existing shareholders also.

Strength of the company

• Strong financial performance
• Largest equity broker in terms of brokerage revenue and customer in NSE.
• Strong customer base through innovative technology and fast service.

Valuation parameter

On financial front, from FY 2015 to FY 2017, we can see revenue/net profit for FY 2015 is Rs. 1209.51 cr. / Rs. 293.87., for FY 2016 Rs. 1124.58 cr. / Rs. 238.72 cr., for FY2017 Rs. Rs. 1404.23 cr. / Rs. 338.59 cr. and for first nine month of current fiscal year revenue is Rs.1344.69 cr. and net profit is Rs. 399.09 cr.

In year 2016, result of the company was in line with the general trends of the markets.

For last three years it has posted average EPS of Rs. 9.25.

After annualizing latest earnings and attribute it on post issue equity then asking price is around a P/E of 31 against industry average of 37.

Should you invest in ICICI Securities IPO?

Expected listing gain of ICICI Securities is around 15%. Recently, Tasty dairy specialties ltd. IPO day listing gain was 7.44% while its total profit above issue price was 8.33%. Uniinfo telecom services Ltd. IPO day listing gain was 1.36%.

With strong financial performance, company is enjoying a good reputation in business world. So, ICICI securities IPO will be a good choice for those investors who want to get listing gain and also, for long term investment.