NSE: HDFC – LIC is going to buy a 9.99% stake in HDFC Bank. RBI has done this, and now HDFC’s bank can become a rocket.
LIC will buy 9.99% stake in HDFC
The Reserve Bank of India (RBI) has given the green light to the Life Insurance Corporation of India (LIC) for the acquisition of a 9.99 percent stake in HDFC Bank, the country’s largest private bank. The approval was communicated to the stock markets, revealing the RBI’s consent for LIC’s substantial investment in HDFC Bank.
- Deadline for Acquisition: LIC is mandated to acquire the specified stake within one year, concluding by January 24, 2025.
- Ownership Limitation: LIC is directed to ensure that its total stake in HDFC Bank does not surpass 9.99 percent of the paid-up share capital or voting rights.
Current Holdings and Market Impact
As of December 31, 2023, LIC holds a 5.19 percent stake in HDFC Bank. This development is expected to have a positive impact on HDFC Bank’s shareholders, especially following recent declines in share prices.
HDFC 52 High and %2 Week Low
| Metric | Value |
|---|---|
| Open | 1,452.50 |
| High | 1,457.35 |
| Low | 1,419.40 |
| Market Cap | 10.90 LCr |
| P/E Ratio | 16.14 |
| Dividend Yield | 1.32% |
| 52-Week High | 1,757.50 |
| 52-Week Low | 1,380.25 |
Read Also
HDFC Bank Share Price Target 2024, 2025, 2026, 2027, 2030, 2035, 2040, 2045, 2050
OLECTRA Greentech Share Price Target 2024, 2025, 2026, 2027, 2030, 2035, 2040, 2045, 2050
Financial Snapshot of HDFC Bank
| Financial Metric | Q3 FY 2023-24 | YoY Growth (%) |
|---|---|---|
| Net Profit | Rs 16,372 crore | +33.5% |
| Net Interest Income (NII) | Rs 28,470 crore | +23.9% |
| Gross NPA | 1.26% (Dec 31, 2023) | – |
| Net NPA | 0.31% (Dec 31, 2023) | – |
HDFC Bank’s third-quarter results showcased a net profit of Rs 16,372 crore, a substantial YoY growth of 33.5 percent. The bank’s NPA figures indicate improvements in asset quality.
Market Reaction
Despite positive financials, HDFC Bank’s shares witnessed a decline, closing at Rs 1,435.30 on January 25, down 1.41 percent from the previous close. The benchmark Sensex index also recorded a 0.51 percent decrease, closing at 70,700.67 points.
LIC’s Strategic Move
LIC’s approval to acquire a significant stake aligns with its strategy, potentially contributing to a boost in HDFC Bank’s share price over the next year. This move is particularly noteworthy amid the challenges faced by HDFC Bank investors following the decline in share prices post the December quarter results.