HDFC Bank gets RBI approval to buy up to 9.5% stake in IndusInd Bank

The RBI has allowed HDFC Bank and its group firms to buy up to 9.5 per cent stake in IndusInd Bank within one year, as the private lender faces losses and governance issue

IndusInd Bank said on Tuesday the Reserve Bank of India (RBI) has approved HDFC Bank’s plan to buy up to a 9.50 per cent stake in the private lender.

 

The approval allows HDFC Bank to become a significant shareholder in IndusInd Bank, which has been facing financial and governance challenges in recent months.

 

The RBI has asked HDFC Bank to complete the acquisition of a major shareholding within one year from the date of approval, which was granted on December 15. If the bank fails to do so within this period, the approval will be cancelled.

 

This condition has been put in place to ensure timely compliance with regulatory norms.

Group entities to make the investment

 

In an exchange filing on Monday, HDFC Bank said that several of its group companies have received permission to invest in IndusInd Bank.

 

These entities include HDFC Mutual Fund, HDFC Life Insurance, HDFC Pension Fund, and others. Together, they can acquire an "aggregate holding" of up to 9.5 per cent of IndusInd Bank’s paid-up share capital or voting rights.

 

IndusInd Bank recently reported its biggest-ever quarterly loss for the three months ended March 31. The loss followed a $230 million hit to its books due to governance and accounting lapses. These issues led to the exit of former Chief Executive Officer (CEO) Sumant Kathpalia and Deputy CEO Arun Khurana earlier this year.  ALSO READ | Fairfax leads race to acquire majority stake in IDBI Bank from govt, LIC

Board under investor scrutiny

 

IndusInd Bank’s board has come under criticism from investors for weak oversight and delays in revealing accounting problems. The lapses were linked to the bank’s derivatives portfolio and had a major impact on its financial results.

 

Earlier this year, IndusInd Bank said it plans to raise up to $3.47 billion and allow its promoters to nominate two directors to the board.

HDFC Bank regains top spot among India’s most valued brands

 

HDFC Bank has emerged as India’s most valued brand for 2025, overtaking Tata Consultancy Services (TCS), according to the Kantar BrandZ Most Valuable Indian Brands report.

 

The country’s largest private lender now has a brand value of $44.9 billion.

 

HDFC Bank’s brand value has risen 377 per cent since the first BrandZ India Report was published in 2014. Kantar BrandZ calculates brand value using financial measures, including the share of the parent company’s value linked to the brand and the brand’s role in driving demand and pricing power.

 

HDFC Bank had topped the rankings from 2014 until 2022, when TCS moved ahead.