HDFC Bank announced on Thursday that the Reserve Bank of India (RBI) has allowed the Life Insurance Corporation (LIC) of India to acquire a 9.99 percent stake in the company.
“LIC has been advised by RBI to acquire the aforesaid major shareholding in the Bank within a period of one year i.e. by January 24, 2025,” the bank said in regulatory filing.
“Pursuant to Regulation 30 of the SEBI Listing Regulations, we would like to inform you that the Reserve Bank of India (RBI) vide its letter dated January 25, 2024 addressed to Life Insurance Corporation of India (LIC), has accorded its approval to LIC for acquiring aggregate holding up to 9.99% of the paid-up share capital or voting rights of HDFC Bank Limited,” the bank further said in its regulatory filing.
LIC currently owns 5.19% stake in HDFC Bank. The insurance giant had earlier sent an application to RBI regarding expanding its shareholding in the bank.
RBI has advised LIC to acquire the major shareholding in HDFC Bank within a period of one year, i.e. by January 24, 2025. Further, LIC must also ensure that the shareholding does not exceed 9.99 percent of the paid-up share capital or voting rights of the bank at all times.
HDFC Bank shares struggle on the markets
This development comes as HDFC Bank shares have been struggling to reach their former potential on the Indian stock markets, after seeing a major dip due to the quarterly results of the private lender.
HDFC Bank shares on Thursday closed 1.4 percent lower at ₹1,440.70. The shares of the private bank took a massive blow after the Q3 results were announced, showing muted profits for the quarter ending in December 2023.
A day after the quarterly results were announced, HDFC Bank shares dropped by 9 percent, while the shares listed on the US markets dropped by around 10 percent on January 17.
HDFC Bank reported a 2.65 per cent rise in consolidated net profit of ₹17,258 crore in its Q3 results as opposed to ₹16,811 crore net profit reported in the quarter ending in September 2023.