HDFC Bank to acquire up to 9.5% in Kotak Mahindra and AU, Capital SFBs

RBI has given approval to HDFC Bank and its group companies to collectively acquire up to 9.5 per cent of paid-up share capital or voting rights in Kotak Mahindra Bank, AU Small Finance Bank

The Reserve Bank of India (RBI) has allowed HDFC Bank to acquire up to 9.5 per cent stake in Kotak Mahindra Bank, AU Small Finance Bank and Capital Small Finance Bank within a year from the approval date.

 

In a regulatory filing, HDFC Bank said that the apex bank, in its letter dated January 3, has given approval to HDFC Bank and its group companies— including HDFC Mutual Fund, HDFC Life Insurance, HDFC Pension Management, HDFC ERGO General Insurance, and others — to collectively acquire up to 9.5 per cent of paid-up share capital or voting rights in Kotak Mahindra Bank, AU Small Finance Bank and Capital Small Finance Bank.

 

“We further wish to inform you that the said approval is valid for a period of one year from the date of RBI’s letter, i.e., till January 2, 2026. Further HDFC Bank needs to ensure that the “aggregate holding” by its group entities in the above-mentioned banks does not exceed 9.50 per cent of the paid-up share capital or voting rights of the respective banks, at all times,” the exchange filing said.

 

The RBI Directions 2023 specify that "aggregate holding" includes shares owned by the bank, its affiliates, mutual funds, trustees, and promoter group entities. HDFC Bank said that it does not intend to directly invest in these banks. However, since it believes that ‘aggregate holding’ of its group entities is likely to exceed the 5 per cent limit, an application was made seeking an approval from the RBI to increase investment limits.

 

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