HDFC Bank can now acquire 9.5% stake in IndusInd Bank
What's the story
The Reserve Bank of India (RBI) has approved a plan by HDFC Bank's subsidiaries to acquire up to a 9.5% stake in IndusInd Bank. The approval is valid for one year from December 15, 2025. It will allow group entities such as HDFC Mutual Fund and HDFC Life Insurance to hold an aggregate holding of up to 9.5% of IndusInd's paid-up share capital or voting rights.
Clarification
HDFC Bank clarifies on direct investment
HDFC Bank has clarified that it does not intend to make a direct investment in IndusInd Bank. The RBI approval was requested because the cumulative holdings of its group companies were likely to breach the earlier regulatory limit of 5%. The application, submitted on October 24, was made on behalf of the group entities as per RBI's Commercial Banks (Acquisition and Holding of Shares or Voting Rights) Directions, 2025.
Stake details
HDFC Midcap Fund's stake in IndusInd Bank
As of the September quarter, HDFC Midcap Fund, a scheme under HDFC Mutual Fund, held a 4.03% stake in IndusInd Bank. This was worth some ₹2,668 crore at Monday's closing price. Mutual funds together own nearly 23% of the bank's equity, with other major shareholders including the Government of Singapore and Life Insurance Corporation of India, among others.
Market response
Market reaction to RBI's approval
Following the RBI's decision, both HDFC Bank and IndusInd Bank shares witnessed a slight dip in today's trading session. At 12:30pm, HDFC Bank shares were down 0.3% at ₹993.10 on the National Stock Exchange while IndusInd Bank fell by 0.63% to ₹845.85 per share. Over the past month, IndusInd Bank stock has declined just over 1%.