HDFC Bank Receives RBI Approval to Acquire Stakes in Six Banks
- ByStartupStory | February 7, 2024
HDFC Bank, India’s largest private sector bank, has announced that it has received approval from the Reserve Bank of India (RBI) to acquire an aggregate holding of about 9.5% of the paid-up share capital or voting rights in six banks. These banks include Axis Bank, Suryoday Small Finance Bank, ICICI Bank, Bandhan Bank, YES Bank, and IndusInd Bank.
The approvals were granted pursuant to applications made by HDFC Bank (as a promoter/sponsor of the Group) to RBI on December 18, 2023. RBI’s approval is valid for one year from the date of RBI’s letter, until February 4, 2025. HDFC Bank clarified that the approvals are intended for investments by HDFC Asset Management Company (AMC), HDFC Ergo, and HDFC Life Insurance, as stated in an exchange filing.
HDFC Bank will have to ensure that its “aggregate holding” in IndusInd Bank does not exceed 9.5% of the paid-up share capital or voting rights of IndusInd Bank at all times. If the “aggregate holding” falls below 5%, prior approval of the RBI will be required to increase it to 5% or more of the paid-up share capital or voting rights of IndusInd Bank and YES Bank. HDFC Bank clarified that it does not intend to invest in these banks but, as the holding was likely to exceed 5%, it made an application to increase the investment limits under RBI rules.
Following this announcement, Yes Bank’s stock surged up to 13% in early trade on the NSE. The bank’s shares witnessed strong buying interest during morning deals and opened upside at Rs 23.10 apiece on the NSE.
However, three of the other listed banks in the list were trading in the red. Axis Bank was trading 0.82% in the red at Rs 1,053.8 apiece, Bandhan Bank was down nearly 1% and was trading at Rs 220.7 apiece, while IndusInd Bank was down over 1.5% and was at Rs 1,515.55 per share.
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