HDFC Granted RBI Approval to Purchase 9.50% Stake in 6 Banks, Including IndusInd: Purchase Mandatory Within a Year

The Reserve Bank of India (RBI) has granted approval to the HDFC Group, including IndusInd Bank, to acquire a stake of up to 9.50% in 6 banks. These banks include ICICI Bank, Bandhan Bank, Axis Bank, Yes Bank, and Ujjivan Small Finance Bank. Last year in December, HDFC Group had sought approval from RBI for this acquisition, which was subsequently granted on February 5th. The central bank has specified that the shares acquired in these banks should not exceed 9.50%.

Stake Purchase Within a Year Compulsory

Following RBI’s approval, HDFC Group is now required to increase its stake in these banks to 9.50% within a year, starting from February 5th, 2025. Companies under HDFC Group, including HDFC Bank, HDFC Mutual Fund, HDFC Asset Management Company, HDFC Ergo, and HDFC Life Insurance, will participate in purchasing stakes in these banks. Failure to make the purchase within the specified time will lead to the cancellation of RBI’s approval, necessitating a reapplication.

Rise in Yes Bank’s Share After RBI’s Approval

Following RBI’s approval for HDFC Group’s acquisition, there has been an increase in Yes Bank’s share by more than 10%. The share was opened at Rs. 23 and is currently trading at Rs. 25. Meanwhile, shares of ICICI Bank and IndusInd Bank have experienced a decrease.

Current Holdings in ICICI Bank and Axis Bank

Currently, HDFC Group holds a stake of 3.43% in ICICI Bank and 2.57% in Axis Bank. However, it does not hold any stake in IndusInd Bank and Yes Bank at present.