- RBI approved ICICI Prudential AMC and group to acquire up to 9.95% in HDFC Bank
- ICICI Group currently holds a 4.07% stake in HDFC Bank, India's largest lender by revenue
- Approval expires if ICICI AMC does not acquire stake within one year from RBI letter date
The Reserve Bank of India has approved ICICI Prudential Asset Management Co. along with group entities of ICICI to acquire aggregate holding of up to 9.95% in HDFC Bank Ltd. The ICICI Group holds 4.07% stake in India's largest lender by revenue.
"The approval has been granted with reference to the application made by ICICI AMC to RBI... In case if ICICI AMC fails to acquire the aforesaid major shareholding in the Bank within a period of one year from the date of the RBI letter, the approval granted by RBI shall stand cancelled," HDFC Bank said in a stock exchange filing late Wednesday.
Further, ICICI Group must ensure that the aggregate holding in HDFC Bank does not exceed 9.95% of the paid-up share capital or voting rights at all times. If the Group's aggregate holding of falls below 5% at any point of time, prior approval of the RBI will be required to increase it to 5% or more of the paid-up share capital or voting rights, the filing added.
The Banking Regulation Act restricts any single entity's voting rights to a maximum of 26% in any bank.
HDFC Bank is India's top private sector bank and the second most valued listed company. Foreign investors own 47.67% stake in the bank, as of December, followed by domestic mutual funds (26.66%), retail investors (9.41%) and insurance companies (7.18%).
Shares of HDFC Bank settled 0.6% lower at Rs 927.10 on the NSE, ahead of the announcement, compared to a flat Nifty 50. The stock is up 9% in the last 12 months.
ALSO READ: State Bank Of India Overtakes TCS To Become Fourth Most Valued Company In India
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
