Fallen star

4 April 2018 By Una Galani Follow @ugalani

ICICI Bank’s brokerage arm plunged on its market debut. A high price and volatile markets played a role, but the $27 bln parent isn’t doing enough to resolve a conflict-of-interest scandal. An independent probe would reassure investors more than soothing words from the board.

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Shares of India's ICICI Securities fell as much as 16.3 percent on their debut on April 4. By mid-afternoon in Mumbai, they stood 15.1 percent lower at 441 rupees a share.

The brokerage raised a lower-than-expected $540 million. Including anchor investors, buyers only subscribed for 88 percent of the shares on offer. Parent ICICI Bank had aimed to raise as much as 40.2 billion rupees ($620 million) from the sale.

On March 28, ICICI Bank said its board had full confidence in Managing Director and Chief Executive Chanda Kochhar, and there was “no question of any quid pro quo/nepotism/conflict of interest”.

Indian media have reported that the chairman of Videocon Group, a consumer electronics and energy company, invested in a firm owned by Kochhar’s husband, after Videocon secured a loan from various banks including ICICI.

Indian police have launched a preliminary investigation into the husband, ICICI and Videocon officials, Reuters reported on March 31, citing two sources.

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