HDFC Bank gets cabinet nod for Rs24,000 crore FDI
14 June 2018
The union cabinet on Wednesday approved a proposal for grant of permission to HDFC Bank to raise additional share capital of up to a maximum of Rs24,000 crore, including premium, provided that the bank’s composite foreign shareholding shall not exceed 74 per cent of its paid-up capital.
This is over and above the previously approved FDI infusion of Rs10,000 crore.
"Even with this infusion the foreign equity will remain capped below 74 per cent," acting finance minister Piyush Goyal said at a press conference while announcing the decisions taken at the cabinet meet.
The decision would ensure that the total foreign shareholding in the bank, including all types of foreign investments, both direct and indirect, does not exceed 74 per cent of the enhanced paid-up equity share capital of the bank, a government release said.
The FDI infusion will be subject to the foreign direct investment policy conditionalities and other sectoral regulations and guidelines, the release stated.
The proposed investment is expected to strengthen the capital adequacy ratio of the bank.
Currently, FDI in the bank stands at 72.62 per cent. Of the additional Rs24,000 crore, Rs8,500 crore is proposed to be allotted to HDFC Ltd, the promoter, on a preferential basis.