Federal Bank vaults as RBI approves hike in foreign investment limit

Federal Bank gained 5% to Rs 90.25 at 12:03 IST on BSE after the Reserve Bank of India withdrew its restrictions placed on purchase of the bank's shares by foreign investors with immediate effect.

The announcement was made after market hours on Friday, 21 March 2014.

Meanwhile, the S&P BSE Sensex was up 3.43 points or 0.02% at 21,757.18

On BSE, so far 3.10 lakh shares were traded in the counter as against average daily volume of 2.46 lakh shares in the past one quarter.

The stock hit a high of Rs 91.50 and a low of Rs 86.75 so far during the day. The stock had hit a 52-week high of Rs 99.98 on 3 April 2013. The stock had hit a 52-week low of Rs 44.25 on 4 September 2013.

The stock had outperformed the market over the past one month till 21 March 2014, rising 17.02% as compared to the Sensex's return of 5.09%. It had also outperformed the market in the past one quarter, gaining 8.18% as compared to the Sensex's 3.2% rise.

The mid-cap bank has equity capital of Rs 171.07 crore. Face value per share is Rs 2.

The Reserve Bank of India on Friday, 21 March 2014 notified that the restrictions placed on the purchase of shares of Federal Bank have been withdrawn with immediate effect. Equity shares of Federal Bank can now be purchased through primary market and stock exchanges, the RBI said.

The Reserve Bank stated that consequent upon the Government of India approving the increase in foreign investment in Federal Bank from 49% to 74% of its paid up equity share capital of Federal Bank the aggregate shareholding through Foreign Institutional Investors (FIIs)/Non-Resident Indians (NRIs)/Persons of Indian Origin (PIOs)/Foreign Direct Investment (FDI)/American Depository Receipt (ADR)/Global Depository Receipts (GDRs) in Federal Bank has gone below the prescribed threshold ban limit stipulated under the extant FDI policy.

FII holding was 42.27% of the total foreign holding of 49.62% in Federal Bank (as per the shareholding pattern as on 31 December 2013).

Federal Bank's net profit rose 9.2% to Rs 230.13 crore on 9.9% growth in total income to Rs 1895.92 crore in Q3 December 2013 over Q3 December 2012.

Federal Bank is a leading private sector bank in India.

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