HDFC Bank, LIC Shares In Focus After RBI Clears Insurer To Raise Stake To 9.99%
Add Preferred News Source
LIC currently holds 4.11% of HDFC Bank and can now raise that stake to nearly 10%, a move that comes shortly after the bank posted a 5% rise in Q1 FY 2026-27 net profit.
Shares of HDFC Bank and Life Insurance Corporation of India (LIC) are likely to remain in focus on Thursday, August 20, after the Reserve Bank of India (RBI) allowed LIC to increase its holding in the private sector lender to as much as 9.99%.
HDFC Bank said in a regulatory filing on Wednesday that it had received a communication from the RBI dated August 19 granting approval to LIC to acquire an aggregate holding of up to 9.99% of the bank's paid-up share capital or voting rights.
According to the latest available shareholding data, LIC held a 4.11% stake in HDFC Bank as of August 14. The RBI approval therefore gives the insurer room to significantly increase its holding, subject to the conditions attached to the approval.
At 12:20 PM on Thursday, HDFC Bank shares were trading 1.08% higher at Rs 727.75 on the NSE. LIC shares were up 1.31% at Rs 418.50.
What Does RBI Approval Mean For LIC's HDFC Bank Stake?
The approval allows LIC to acquire shares in HDFC Bank up to the 9.99% threshold. It follows an application made by the insurer to the RBI.
The approval is subject to several regulatory requirements. These include compliance with the Banking Regulation Act, 1949, the RBI's Commercial Banks - Acquisition and Holding of Shares or Voting Rights Directions, 2025, the Foreign Exchange Management Act, 1999, and applicable Securities and Exchange Board of India (SEBI) regulations.
The approval is also subject to other applicable laws, regulations and guidelines.
LIC currently holds 4.11% in HDFC Bank, meaning any increase in its stake would involve further purchases from the market.
HDFC Bank Q1 FY27 Results Snapshot
The RBI approval comes shortly after HDFC Bank reported a 5% rise in standalone net profit for the June quarter.
Net profit stood at Rs 19,060 crore in Q1 FY27, compared with Rs 18,155 crore in the same period a year earlier. Net interest income (NII) increased 7% year-on-year to Rs 33,530 crore from Rs 31,440 crore.
Interest income rose to Rs 79,363 crore from Rs 77,470 crore in the year-ago quarter.
However, total income declined to Rs 92,184 crore from Rs 99,200 crore, while operating profit fell to Rs 28,169 crore from Rs 35,734 crore.
HDFC Bank's net interest margin stood at 3.26% on total assets and 3% based on interest-earning assets.
Asset quality improved during the quarter. Gross non-performing assets declined to 1.17% of gross advances from 1.40% a year earlier, while net NPAs fell to 0.41% from 0.47%.
HDFC Bank, LIC Share Price
HDFC Bank shares were trading at Rs 727.75, up 1.08%, at the time of writing on Thursday. LIC shares were at Rs 415.80, higher by 0.65%, at the same time. The insurer's stock was later quoted at Rs 422.40, up 2.25%, based on the latest market price available.
The RBI approval is likely to keep both counters in focus as investors assess the possibility of LIC increasing its stake in HDFC Bank and the implications of the move for the bank's shareholding structure.
Also Read - NSE IPO 2026: Will It Be India's Biggest IPO? September Launch In Focus
This article is for informational purposes only and should not be considered investment advice from Kotak Neo. For compliance T&C and disclaimers, Visit www.kotakneo.com/disclaimer
Rochelle Britto has spent 8+ years decoding India's markets, businesses, and consumer economy, reporting for ET Prime and Times Internet along the way, covering the stories behind the numbers.
A Mumbai native and perpetual planner of the next holiday, she stays far, far away from the eternal question, “Where are we going next?” When she's not chasing headlines, she's chasing new cultures, open roads, and a bit of quiet in nature.
