HDFC Bank slips on buzz Govt turns down proposal for hiking FII limit

HDFC Bank fell 0.49% to Rs 798.65 at 9:52 IST on BSE on reports the government has turned down the bank's proposal to raise the cap on foreign institutional investment to 67.55% from 49%.

Meanwhile, the BSE Sensex was up 291.11 points, or 1.19%, to 24,665.51.

On BSE, so far 79,000 shares were traded in the counter, compared with an average volume of 2.06 lakh shares in the past one quarter.

The stock hit a high of Rs 802 and a low of Rs 789.20 so far during the day. The stock hit a record high of Rs 852.35 on 16 May 2014. The stock hit a 52-week low of Rs 528 on 28 August 2013.

The stock had outperformed the market over the past one month till 22 May 2014, rising 10.50% compared with 7.10% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rising 20.73% as against Sensex's 17.75% rise.

The large-cap company has an equity capital of Rs 480.21 crore. Face value per share is Rs 2.

According to reports, the government has turned down HDFC Bank's proposal to raise the cap on foreign institutional investment to 67.55% from 49% after a prolonged debate. This implies that foreigners will not be able to invest further in HDFC Bank.

The Reserve Bank of India (RBI) had stopped further purchases by foreign institutional investors (FIIs) in the bank after the 49% ceiling was breached last December. The law ministry, which was asked to give its opinion on the proposal, had wanted both the Department of Industrial Policy and Promotion (DIPP) and the Department of Economic Affairs (DEA) to take a call on the matter. DIPP and RBI had earlier said the HDFC Bank's proposal was not in line with the foreign direct investment (FDI) policy, reports added.

HDFC Bank's net profit rose 23.11% to Rs 2326.52 crore on 14.94% increase in total income to Rs 12789.98 crore in Q4 March 2014 over Q4 March 2013.

HDFC Bank is a leading private sector bank in India.

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