The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi, gave its approval to the proposal of HDFC Bank for maintaining the permissible foreign holding in the bank up to 74 percent of the total paid-up capital and issuance of equity shares aggregating to an amount of Rs 10,000 crore to NRIs/FIIs/FPIs.
The approval would result in foreign investment of Rs 10,000 crore (approximately) in the country.
Meanwhile it has also allowed Lupin to increase in aggregate limit of investment by FIIs and their sub-accounts registered with SEBI, from 33 percent to 49 percent, which would result in foreign investment of around Rs 6099 crore in the country.
The Foreign Investment Promotion Board had cleared HDFC Bank’s proposal in December and had green lighted Lupin’s FDI proposal in November.
Calling the move a positive one, Jignesh Shial, Research Analyst, IDBI Capital Markets, said the decision will come as further boost for the bank and ease its hurdle on the capital front.
"Overall we can say this was a hangover, this was probably a problem that the stock was facing and that is why it was consolidating for long and management was expecting it to get cleared. So, this will be a positive boost for the bank as such," he said.
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