06-Feb-2024
2 mins read
India’s top private sector lender HDFC Bank Group got approval from the RBI to raise its stake in Yes Bank to 9.5%. It positively impacted the Yes Bank share price which surges more than 11% on an intraday session.
This approval by RBI will be valid for one year. If the HDFC Bank step back and fails to acquire holding in the mentioned period. Then the approval stands cancelled.
The approval for acquiring the stake is intended for investment by HDFC Asset Management Company, HDFC Ergo and HDFC Life Insurance.
The RBI’s approval is subject to compliance with the relevant provisions of Banking and Regulation Act, 1949. RBI’s Master Direction and Guidelines on Acquisition and Holding of Shares or Voting Rights in the Banking companies.
HDFC Bank Aggregate Holdings must not exceed 9.50%
HDFC Bank has to ensure that the aggregate holding in Yes Bank should not exceed 9.50% in Yes Bank. However, if the total holding falls below 5% prior to approval then the bank must increase its holdings.
According to the shareholdings pattern of the Yes Bank, the 100% stake is held by the public. Out of this, LIC holds 4.34% stake. While the SBI led consortium holds 37.23% stake.
Yes Bank Informed Exchange
Yes Bank informed exchange, about the RBI’s approval of HDFC Bank’s cross holding plans saying “Pursuant to Regulation 30 of SEBI Regulations, 2015, as amended, we wish to inform you that YES Bank Limited has received an intimation from the Reserve Bank of India dated February 5, 2024, that it has accorded its approval to HDFC Bank Limited (“Applicant”) for acquiring aggregate holding of up to 9.50% of the paid-up share capital or voting rights of the Bank.”
After this news hit, the stock price of Yes Bank shot up and breakout of the Rs 25 mark. However, the HDFC Bank share price remains silent and closes the session at Rs 1,444.10 with a decline of 0.05%.