LIC acquire HDFC Bank Share

The Reserve Bank of India (RBI) has approved Life Insurance Corporation of India's acquisition of a 9.99 percent stake in HDFC Bank.

HDFC Bank stated that LIC must complete the acquisition within one year, by January 24, 2025, and ensure that its total stake does not exceed 9.99 percent of the bank's paid-up share capital or voting rights.

As of December 31, 2023, LIC currently holds a 5.19 percent stake in HDFC Bank.

The RBI communicated its decision to LIC through a letter dated January 25, allowing LIC to acquire up to 9.99 percent of HDFC Bank's paid-up share capital or voting rights.

The approval is viewed as positive news for HDFC Bank shareholders, particularly after recent heavy selling that led to 52-week lows following the bank's third-quarter earnings announcement.

Foreign portfolio investor sales in HDFC Bank are subject to Securities and Exchange Board of India (SEBI) guidelines.

As of January 25, HDFC Bank's shares closed at Rs 1435.30 on BSE, down 1.41 percent from the previous close, while the Sensex ended 0.51 percent lower at 70,700.67 points.

In the October-December quarter of 2023-24, HDFC Bank reported a net profit of Rs 16,372 crore, marking a 33.5 percent increase from the previous year's Rs 12,259 crore.

The bank's net interest income (NII) for the same quarter was Rs 28,470 crore, reflecting a 23.9 percent growth compared to the previous fiscal year.

HDFC Bank's non-performing loans (NPL) showed improvement, with gross NPA at 1.26 percent and net NPA at 0.31 percent for the quarter, indicating positive trends in asset quality.