HDFC Bank share price gains 2% after RBI approves LIC's stake acquisition
₹1,462.80 apiece in early trade on Monday. This uptick follows the approval granted by the Reserve Bank of India (RBI) to LIC, allowing it to increase its stake up to 9.99% in the country's largest private sector bank. In an exchange filing on Thursday (January 25), HDFC Bank stated that permission was given to LIC with regard to the application submitted to RBI.
LIC has been advised by the RBI to acquire the 9.99% shareholding in the bank within a period of one year, by January 24, 2025. At the end of Q3FY24, LIC held 340,921,284 shares, representing a 5.19% stake in the Bank. The estimated value of this stake, based on the Thursday closing price of the stock, stands at ₹48,836 crore.
With this approval, LIC can now buy an additional 4.8% stake. No penalty will be imposed on LIC if they do not increase their stake to 9.99%. It is not that they must increase their stake to the said limit.
However, 9.99% should be the maximum, as experts pointed out. Also Read: LIC gets a green signal to raise stake in HDFC Bank: Can this help boost investor sentiment in the lender's stock? Mohit Gulati, CIO & Managing Partner of the ITI Growth Opportunities Fund, said this is fantastic news for HDFC stockholders. Although the stock has suffered and is almost at a 52-week low, the company is one of the few private lenders that has endured throughout time.
The results were, of course, well below expectations. LIC is unquestionably a sentimental booster, according to Gulati. Further, Mohit thinks the downside for the stock is somewhere very close right now, so we could see it bounce back.
Read more on livemint.com
