RBI Allows HDFC Group To Hold Up To 9.5% Stake In IndusInd Bank
RBI Allows HDFC Group To Hold Up To 9.5% Stake In IndusInd Bank
Approval valid till December 14, 2026; applies to aggregate holdings of HDFC Bank group entities, not a direct investment by the bank.
The Reserve Bank of India (RBI) has granted approval to HDFC Bank group companies to collectively hold up to a 9.5% stake in IndusInd Bank, a move that has drawn attention across the banking sector. The approval, issued on December 15, is valid for one year, up to December 14, 2026.
HDFC Bank clarified in a regulatory filing that it does not plan to make a direct investment in IndusInd Bank. Instead, the permission applies to the aggregate holding of its group entities, which include HDFC Mutual Fund, HDFC Life Insurance Company, HDFC ERGO General Insurance, HDFC Pension Fund Management, and HDFC Securities.
The approval was sought after the cumulative holdings of these group companies were expected to cross the earlier regulatory threshold of 5%. Under RBI norms, any entity or group seeking to acquire 5% or more of a bank’s paid-up share capital or voting rights must obtain prior regulatory approval.
RBI has made it clear that at no point should the combined holding of HDFC Bank group entities exceed 9.5% of IndusInd Bank’s paid-up share capital or voting rights. The central bank’s decision aligns with its broader objective of maintaining competition and preventing excessive influence of one banking group over another.
According to the exchange filing, the application was submitted on October 24 under the RBI’s Commercial Banks (Acquisition and Holding of Shares or Voting Rights) Directions, 2025. The approval strictly applies to the group’s collective exposure and not to any single entity exceeding the permitted limit.
As per the latest shareholding data for the September quarter, HDFC Midcap Fund held a 4.03% stake in IndusInd Bank, valued at around ₹2,668 crore. Overall, mutual funds together own close to 23% of IndusInd Bank’s equity. Other notable investors include the Government of Singapore, Government Pension Fund Global, BNP Paribas and Life Insurance Corporation of India.
Following the RBI announcement, shares of both banks traded slightly lower. In early trade on Tuesday, HDFC Bank shares slipped marginally to around ₹995 on the NSE, while IndusInd Bank shares declined to about ₹845. Over the past year, IndusInd Bank stock has fallen over 15%, while HDFC Bank has gained nearly 7%.
The RBI decision is seen as a regulatory relaxation from the earlier 5% cap, while still ensuring that ownership concentration in the banking system remains under close supervision.
