The approval is valid for one year from January 3, 2025, after which it will expire if the acquisition is not finalized.
HDFC Bank also announced that it has received RBI approval to acquire up to 9.5% stake in Kotak Mahindra Bank and Capital Small Finance Bank.
The Reserve Bank of India (RBI) has allowed India’s largest private lender HDFC Bank to acquire up to 9.5% stake in AU Small Finance Bank (AU SFB). The approval is valid for one year from January 3, 2025, after which it will expire if the acquisition is not finalized.
In a regulatory filing, AU SFB disclosed that RBI approval extends to HDFC Bank and its group companies, including HDFC Mutual Fund, HDFC Life Insurance, HDFC Pension Management, HDFC ERGO General Insurance, and HDFC Securities. Together, these entities are allowed to collectively hold up to 9.5% of the paid-up share capital or voting rights of AU SFB.
HDFC Bank also announced that it has received RBI approval to acquire up to 9.5% stake in Kotak Mahindra Bank and Capital Small Finance Bank. This approval will remain valid till January 2, 2026.
However, the RBI has mandated that the total ownership of HDFC Bank and its group entities in these entities should not exceed a limit of 9.5 percent. As per RBI guidelines 2023, “gross holding” includes shares of the bank, its subsidiaries, mutual funds, trustees, and promoter group.
While HDFC Bank does not intend to invest directly in these banks, the collective shareholding of its group companies may exceed the 5% threshold, which requires regulatory clearance. To meet this, HDFC Bank sought approval to increase its investment limit.
On January 3, HDFC Bank shares fell 2.5 percent to close at Rs 1,749, amid widespread market selling. Trading volume increased as around 1 crore shares were exchanged, higher than the one-month and one-week average of 9.4 lakh shares. Money control.