HDFC Bank’s plan to raise ` 24K cr via FDI gets govt nod

Financial Chronicle - - FRONT PAGE - FC BUREAU

THE gov­ern­ment on Wed­nes­day ap­proved the pro­posal of HDFC Bank to raise an ad­di­tional cap­i­tal of Rs 24,000 crore by sell­ing eq­uity to for­eign in­vestors to fund its busi­ness growth.

With the rais­ing of this cap­i­tal, for­eign direct in­vest­ment (FDI) in the bank will hit the reg­u­la­tory ceil­ing of 74 per cent. At present, the FDI in the bank stands at 72.62 per cent. As per the RBI guide­lines, for­eign hold­ing in pub­lic sec­tor banks can­not go be­yond 74 per cent.

Shares of HDFC Bank closed nearly 0.46 per cent lower at Rs 2,035.25 apiece on BSE on Wed­nes­day. The cab­i­net ap­proval came af­ter the close of mar­ket hours.

“The de­ci­sion would en­sure that the com­pos­ite for­eign share­hold­ing in the bank in­clu­sive of all types of for­eign in­vest­ments, both direct and in­di­rect, will not ex­ceed 74 per cent of the en­hanced paid-up eq­uity share cap­i­tal of the bank,” said fi­nance min­is­ter Piyush Goyal af­ter the prime min­is­ter Naren­dra Modi chaired cab­i­net meet­ing which cleared the pro­posal.

The ap­proval will, how- ever, be sub­ject to FDI pol­icy con­di­tions and other sec­toral reg­u­la­tions or guide­lines.

The pro­posed in­vest­ment is ex­pected to strengthen the cap­i­tal ad­e­quacy ra­tio of the bank, he said.

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