By Malvika Gurung
Investing.com -- Shares of HDFC Life Insurance (NS: HDFL ) Company zoomed 8.2% on Monday and hit the session’s high at Rs 555.55 apiece as the Street reacted to RBI’s permission to HDFC twins for raising a stake in the private insurer to over 50%.
The Reserve Bank of India has permitted HDFC Bank (NS: HDBK ) or HDFC Ltd (NS: HDFC ) to increase their shareholding in HDFC Life Insurance and HDFC ERGO to more than 50% before the effective date of the merger.
As on March 31, 2023, HDFC held a 48.65% stake in HDFC Life and a 49.9% stake in HDFC Ergo.
India’s largest mortgage lender HDFC Ltd informed the stock exchanges that HDFC Bank has received a letter dated April 20, 2023, from RBI on certain forbearances sought by it, in relation to the ongoing merger Scheme.
The banking regulator has also asked HDFC Bank to comply with liquidity and reserves requirements from the date of the merger, without any exception.
"Either HDFC or HDFC Bank can increase their stake above 50% before the effective date of the merger. There are no guidelines whether this has to be through a fresh infusion of funds or purchase of shares from the market,” said the CFO of HDFC Bank, Srinivasan Vaidyanathan.
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