Mumbai, August 20: Shares of India’s largest private sector lender, HDFC Bank Limited, rose nearly 2% in early trades on Thursday after the Reserve Bank of India (RBI) approved Life Insurance Corporation of India’s (LIC) application to increase its stake in the bank up to 9.99%.
This approval has granted the state-backed insurance major room to acquire additional voting rights and share capital, though LIC is not expected to execute the entire transaction immediately. Currently, LIC holds a 4.11% equity stake in HDFC Bank.
With this, LIC is likely to deploy its long-term policyholders funds into HDFC Bank, rather than making an immediate block purchase, banking analysts note. The approval must comply with the Banking Regulation Act, 1949, the Foreign Exchange Management Act (FEMA), 1999, and other guidelines issued by SEBI, HDFC Bank said in a regulatory filing.
With HDFC Bank’s operating profit declining to Rs.28,169 crore for the quarter ended June 30, 2026 from Rs.35,734 crore during the same period last year, this development has come as a positive sign for its investors, as its other financials, including its Net Interest Income (NII) and Net Interest Margin (NIM) remain strong.
This approval has come a day after the Bank’s stock hit its 52 week low in intraday trade, mostly as its financial performance hasn’t meet expectations, while sudden resignation of its part time chairman and the lack of clarity on the term extension of its MD and CEO has impacted the price movements.
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