AU Small Finance Bank shares hit fresh 52-week high on govt approval to raise foreign investment limit

AU Small Finance Bank shares rise in trade.

AU Small Finance Bank shares rose to a fresh 52-week high on Wednesday after the lender received approval from the Department of Financial Services to raise its foreign investment limit to 74 percent of its paid-up capital.

The Ministry of Finance had cleared the bank’s proposal to increase the cap from the existing 49 percent to the maximum level permitted for private sector banks.

Following the development, the stock gained 3.62 percent to an intraday high of Rs 1,007.25 on the National Stock Exchange, marking its new 52-week peak. The shares have advanced for two consecutive sessions and are up more than 5 percent during this period.

The bank said the higher limit will help maintain adequate headroom for foreign investment under the consolidated FDI policy. The approval carries no restriction on its validity, according to a report by CNBC-TV18.

Under current norms, foreign investment of up to 49 percent in private sector banks is allowed through the automatic route, while proposals between 49 percent and 74 percent require government approval.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.