Market regulator SEBI has asked ICICI Prudential AMC to return Rs 240 crore to investors of several schemes which were used to subscribe to the IPO of ICICI Securities. The subscription was found to be violative of the code of conduct for mutual funds.
ICICI Securities, a subsidiary of ICICI Bank, had an Initial Public Offering (IPO) in March 2018. The investor interest in the offering was much lower than anticipated despite the fund house reducing the offer size of Rs 3,500 crore. This was also the case in the Qualified Institutional Buyer (QIB) segment where ICICI Prudential AMC applied. The AMC applied for shares worth Rs 640 crore through five schemes, Balanced Advantage, Balanced, Banking and Financial Services, Focused Bluechip and Value Fund (Series 19). It applied for Rs 400 crore on the first day of bidding and Rs 240 crore on the last day.
The regulator found the last day subscription was an outcome of the group trying to rescue the IPO rather than purely an investment decision. It has hence asked ICICI Prudential AMC to credit Rs 240 crore back to its schemes along with 15% interest. The regulator has also asked the fund house to calculate the loss suffered by investors who exited the schemes in question after the IPO and compensate them for it along with 15% interest.
ICICI Securities closed at Rs 326.25 on the NSE on Monday which is 37.25% below the IPO issue price of Rs 520.