HDFC Bank gets RBI nod to hike group stake in 3 banks – Newz9

MUMBAI: HDFC Bank has knowledgeable the inventory exchanges that it has obtained approval from RBI for its group entities to hike investments in Kotak Mahindra Bank, AU Small Finance Bank,and Capital Small Finance Bank up to 9.5% of their share capital.
RBI, via letters dated Jan 3, granted approval to HDFC Bank, because the promoter and sponsor of its group entities, together with HDFC Mutual Fund, HDFC Life InsuranceHDFC ERGO General Insurance, and HDFC Pension Fund Management, amongst others.
HDFC Bank clarified that whereas it doesn’t intend to make investments in these banks straight, the “aggregate holding” of its group entities is probably going to exceed the prescribed 5% restrict. This prompted the financial institution to apply to RBI on Sep 20, 2024, to approve rising the funding limitsThe investments, the financial institution stated, are a part of the common course of enterprise for its group entities.
HDFC Mutual Fund, with property below administration (AUM) of Rs 7.7 lakh crore, and HDFC Life Insurance, managing shut to Rs 3 lakh crore, have important funding portfolios. HDFC Bank holds the biggest funding ebook throughout the group, primarily comprising authorities bonds, with its non-SLR ebook amounting to Rs 1.7 lakh crore. HDFC Pension Fund not too long ago crossed Rs 1 lakh crore in AUM.
Investors in banks should search prior approval from RBI earlier than rising their stake past 5% threshold, not like in different listed corporations the place disclosures are triggered after crossing particular thresholds. SEBI laws mandate buyers buying over 5% of an organization’s shares or voting rights to disclose their holdings inside two working days. Further disclosures are required if the stake will increase or decreases by 2% or extra.
The approval, legitimate till Jan 2, 2026, is topic to sure situations. HDFC Bank should be sure that the “aggregate holding” of its group entities in these banks doesn’t exceed 9.5% of their paid-up share capital or voting rights at any time. “Aggregate holding” contains shareholding by the financial institution, entities below the identical administration or management, and holdings by mutual funds, trustees, and promoter group entities, as outlined by RBI’s 2023 pointers on banking share acquisitions.