RBI approves HDFC Bank proposal to buy up to 9.5% stake in IndusInd Bank

The Reserve Bank of India has cleared HDFC Bank's proposal to acquire nearly 9.5 per cent stake in IndusInd Bank.

"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 February 5, 2024 has accorded its approval to HDFC Bank Limited (“applicant”) for acquiring “aggregate holding” of up to 9.50 per cent of the
paid-up share capital or voting rights in IndusInd Bank Limited (“the Bank”). The aforesaid RBI approval has been granted with reference to the application made by the applicant to the RBI," IndusInd Bank said in a filing.

The approval is valid for one year and if HDFC Bank fails to acquire the shareholding within that period, the approval stands cancelled.

HDFC Bank has to ensure the “aggregate holding” in IndusInd does not exceed 9.50 percent of the paid-up share capital or voting rights of IndusInd, at all times. If the “aggregate holding” falls below 5 percent, prior approval of the RBI will be required to increase it to 5 percent or more of the paid-up share capital or voting rights of IndusInd.

According to the shareholding pattern of IndusInd Bank, promoters IndusInd International Holdings Ltd and IndusInd Ltd together hold 16.45 per cent stake in the bank. Mutual funds hold a combined 15.63 per cent stake in the bank as of December 2023 while insurance companies, including LIC, holds 7. 04 per cent stake. Foreign portfolio investors together hold 38.24 per cent stake as of December quarter.