HDFC Bank has received approval from India’s central bank, the Reserve Bank of India (RBI), for its subsidiaries to acquire up to a 9.5% stake in IndusInd Bank.
The approval has been given to HDFC units, HDFC Mutual Fund, HDFC Life Insurance, HDFC ERGO General Insurance, HDFC Pension Fund Management, and HDFC Securities.
These units are allowed to jointly purchase up to 9.5% of IndusInd Bank’s paid-up share capital or voting rights, within one year, until 14 December 2026.
Download sample pages of selected reports
Explore a selection of report samples we have handpicked for you. Get a preview of the insights inside. Download your free copy today.
According to a report from Kotak Securities, the regulations previously limited bank shareholding in another bank to 5% without explicit clearance.
HDFC Bank group held approximately 4.23% stake in IndusInd Bank at the end of September, and RBI’s approval marks an increase from this earlier threshold.
IndusInd Bank recently reported its largest-ever quarterly loss for the financial year ending March 2025.
This loss resulted from a $230m accounting and governance issue, which led to the departures of former CEO Sumant Kathpalia and Deputy CEO Arun Khurana.
The bank’s board of directors were criticised for its oversight and the delay in disclosing risks related to its derivative portfolio.
In response, IndusInd Bank initiated measures aimed at strengthening its governance framework and improving its capital position.
The bank plans to raise $3.47bn and allow promoters to nominate two directors to its board, to stabilise its operations and restore investor confidence, the report said.
Earlier this year, HDFC Bank Group secured approval from the RBI to increase its aggregate holding in three banking entities.
This clearance allowed the group to acquire stakes of up to 9.5% in Kotak Mahindra Bank, AU Small Finance Bank, and Capital Small Finance Bank.
HDFC Bank is required to ensure that its group entities’ combined holdings do not surpass the 9.5% threshold in the paid-up share capital or voting rights of these banks.
Unlock up to 35% savings on GlobalData reports
Use the code at checkout in the report store
-
20% OFF
Buy 2 reports
Use code:
Bundle20
-
25% OFF
Buy 3 reports
Use code:
Bundle25
-
30% OFF
Buy 4 reports
Use code:
Bundle30
-
35% OFF
Buy 5+ reports
Use code:
Bundle35
Valid on all reports priced $995 and above. Cannot be combined with other offers.
Still deciding what will work best for your business?
Ask our experts for help.
Enquire before buying
