HDFC Bank group gets RBI nod to acquire 9.50% stake in 6 banks

Banking heavyweight HDFC Bank group has received the Reserve Bank of India (RBI) approval to acquire an “aggregate holding” of up to 9.50% of the share capital or voting rights in Axis Bank Limited, Suryoday Small Finance Bank Limited, ICICI Bank Limited, Bandhan Bank Limited, Yes Bank Limited, and IndusInd Bank Limited.

The approvals were granted after applications made by HDFC Bank to RBI on December 18, 2023. The RBI’s approval is valid for one year from the date of the RBI’s letter, i.e., till February 4, 2025.

Further, HDFC Bank will ensure that the “aggregate holding” in the above‐mentioned banks does not exceed 9.50% of the paid‐up share capital or voting rights of the respective banks, at all times.

“...“aggregate holding” includes shareholding by the Bank, entities under the same management/ control, mutual funds, trustees, promoter group entities, etc. In view of the same, whilst HDFC Bank does not intend to invest in these banks, since the “aggregate holding” of HDFC Bank group, was likely to exceed the prescribed limit of 5%, an application seeking approval of RBI for an increase in investment limits was made,” an HDFC Bank stock exchange filing says.

The bank says since the RBI directions apply to HDFC Bank, the bank had made the application to RBI on behalf of the group.

IndusInd Bank and YES Bank say the RBI, granting the above-referred approval, has conveyed that if the applicant fails to acquire major shareholding within one year, it will stand cancelled. “Further, the applicant shall ensure that the “aggregate holding” in the Bank does not exceed 9.50% of the paid-up share capital or voting rights of the 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 the Bank,” both the banks said in their respective statements.

Shares of HDFC Bank are trading 0.56% down today at ₹1,436.30. HDFC Bank shares opened flat at ₹1,445.10. In the first two hours of trade so far, the banking heavyweight fell to an intra-day low of ₹1,434.40. At 11:01 AM, HDFC Bank shares were trading down 0.60% at ₹1,436.45, while the market capitalisation stood at ₹10.9 lakh crore. On the volume front, 3.16 lakh shares were changing hands as compared to a two-week average of 13.43 lakh.

The bank posted a 33.54% year-on-year (YoY) rise in standalone net profit at ₹16,372.54 crore in Q3 FY24, compared with ₹12,259.49 crore in the same quarter last year, which was largely in line with Street estimates. Net interest income (NII) rose 23.9% YoY to ₹28,470 crore, which fell short of analyst’s estimates of 25%. The net interest margin (NIM) remained stable sequentially at 3.6% and there was compression on a YoY basis.