HDFC Bank Group Receives RBI Approval to Acquire Up to 9.5% Stakes in Yes Bank, IndusInd, and Four Others

The HDFC Bank Group has been granted approval by the Reserve Bank of India (RBI) to acquire an aggregate holding of up to 9.5% in six banks. This approval follows the group’s submission of applications to the RBI, seeking to acquire paid-up share capital or voting rights of up to 9.5% in each bank.

The entities included in the HDFC Bank Group, such as HDFC Mutual Fund, HDFC Life Insurance Co., HDFC ERGO General Insurance Co., among others, have been permitted to acquire up to 9.5% of the share capital or voting rights in the following banks:

This approval was granted in response to applications submitted by HDFC Bank, acting as a promoter and sponsor of the group, on December 18, 2023. The RBI has stipulated that if the applicant fails to acquire a major shareholding within one year from the date of the RBI letter, the approval will be cancelled. Additionally, the applicant must ensure that the aggregate holding in the bank does not exceed 9.5% of the paid-up share capital or voting rights at all times. If the aggregate holding falls below 5%, prior approval from the RBI will be necessary to increase it to 5% or more.

Following this news, shares of HDFC Bank experienced a decline of up to 0.58% and are currently trading 0.36% lower at Rs 1,439.65. This contrasts with a 0.09% increase in the NSE Nifty 50 index.

According to Bloomberg data, out of 50 analysts tracking the company, 45 maintain a ‘buy’ rating, while five recommend a ‘hold’. The average 12-month analysts’ consensus price target suggests an upside of 34.7%.

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