The Reserve Bank of India (RBI) granted approval on Thursday to the Life Insurance Corporation of India (LIC) to acquire up to 9.99% of the aggregate holding of paid-up share capital in HDFC Bank, the largest private sector bank in the country. This approval follows LIC's application to the RBI, as reported in a stock exchange filing by HDFC Bank.
The RBI has advised LIC to acquire the major shareholding in HDFC Bank within one year, specifically by January 24, 2025. Additionally, the regulatory authority stipulates that LIC must ensure the aggregate holding in the bank does not exceed 9.99% of the paid-up share capital or voting rights of HDFC Bank at any given time.
In adherence to Regulation 30 of the SEBI Listing Regulations, HDFC Bank informed the stock exchange about the RBI's approval in a filing dated January 25, 2024. The approval is subject to various conditions, including compliance with the relevant provisions of the Banking Regulation Act, 1949, RBI's Master Direction and Guidelines on Acquisition and Holding of Shares or Voting Rights in Banking Companies issued on January 16, 2023, provisions of the Foreign Exchange Management Act, 1999, regulations issued by the Securities and Exchange Board of India, and any other applicable guidelines, regulations, and statutes.
HDFC Bank shares had recently experienced a substantial sell-off in the stock market, leading to their near-52-week lows, following the release of the bank's third-quarter results. The approval from RBI for LIC's acquisition could have significant implications for the dynamics of shareholding in HDFC Bank.
(With Agency Inputs)
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