Shares of HDFC Bank Ltd saw an uptick in Thursday's trading, snapping a two-day decline, following the announcement that the Reserve Bank of India (RBI) has granted approval to Life Insurance Corporation of India (LIC) to increase its holding in the private sector lender. LIC can now acquire an aggregate holding of up to 9.99% of HDFC Bank's paid-up share capital or voting rights.
RBI Approval Details
HDFC Bank informed the stock exchanges that the RBI's approval was conveyed via a letter dated August 19, 2026. As of August 14, 2026, LIC's beneficial position stood at 4.11% of the bank's total share capital. The regulatory clearance comes with several conditions, requiring compliance with provisions of the Banking Regulation Act, 1949, the Reserve Bank of India (Commercial Banks - Acquisition and Holding of Shares or Voting Rights) Directions, 2025, the Foreign Exchange Management Act, 1999, regulations issued by the Securities and Exchange Board of India (SEBI), and any other applicable statutes, regulations, and guidelines.
Market Performance & Analyst Outlook
At last check, HDFC Bank's stock was trading approximately 0.98% higher at Rs 727.20. Despite this recent gain, the counter remains down 26.60% on a year-to-date (YTD) basis. The bank's stock has faced considerable pressure in recent months, partly due to concerns that arose following the unexpected resignation of its former chairman, Atanu Chakraborty.
Sunny Agrawal, Head of Fundamental Research at SBI Securities, noted that HDFC Bank's stock is currently trading at a reasonable valuation. However, he cautioned that investors might need to anticipate a gradual recovery, potentially spanning two to three quarters. Agrawal suggested that investors with a slightly longer investment horizon could consider HDFC Bank. Meanwhile, analysts at Bajaj Broking have assigned a 'Buy' call on HDFC Bank, citing the bank's decent performance despite a challenging operating environment and higher funding costs. According to Bajaj Broking, the bank's net interest income (NII) and net profit increased by approximately 7% and 5% year-on-year (YoY), respectively.