The RBI (Reserve Bank of India) has approved HDFC Bank and its group companies to acquire up to a 9.5% stake in Kotak Mahindra Bank, AU Small Finance Bank, and Capital Small Finance Bank. This approval is valid for 1 year until January 2, 2026.
In a regulatory filing, HDFC Bank mentioned that the RBI had permitted its group companies—including HDFC Mutual Fund, HDFC Life Insurance, HDFC Pension Management, and HDFC ERGO General Insurance—to collectively own voting rights or up to 9.5% of the paid-up share capital in the 3 banks. The bank must ensure that the combined holdings of its group entities remain within this limit.
The RBI’s guidelines specify that “aggregate holding” includes shares owned by the bank itself, its affiliates, mutual funds, trustees, and promoter group entities. HDFC Bank clarified that it does not plan to directly invest in these banks. However, it applied for approval as the combined holdings of its group entities are likely to exceed the 5% threshold set by the RBI.
The approval is effective for a one-year period from January 3, 2025, and HDFC Bank must adhere to the prescribed 9.5% limit for its group entities across the 3 banks. This move allows HDFC Bank to strengthen its presence in the banking and financial sector through strategic investments.
HDFC Bank Limited, also known as HDFC, is an Indian banking and financial services company based in Mumbai. With a market capitalisation of $145 billion as of April 2024, HDFC Bank is the third-largest company listed on Indian stock exchanges.
HDFC Bank share price is trading at ₹1,745.05, down by ₹4.15 (0.24%) as of January 6, 9:46 AM. The stock opened at ₹1,740.10 and reached a high of ₹1,757.20 and a low of ₹1,736.30 during the day. The 52-week high and low for the stock are ₹1,880.00 and ₹1,363.55, respectively.
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Published on: Jan 6, 2025, 9:53 AM IST
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