RBI order insures gains for HDFC Life stock; analysts see up to 83% upside

RBI's permission to increase stake in subsidiaries puts an end to the overhang on the stock, said Motilal Oswal in a note

The rally in shares of HDFC Life Insurance Company may have more legs as the Reserve Bank of India's diktat, allowing HDFC Bank/HDFC Ltd to increase their stake in the insurance arm to over 50 per cent, has removed a key overhang, analysts said.

Last week, private sector lender HDFC Bank informed the exchanges that the RBI has allowed HDFC Bank or HDFC Limited to increase their shareholding in HDFC Life and HDFC ERGO to more than 50 per cent prior to the effective date of the merger, assuaging concerns that the holding may have to be reduced to around