The Union cabinet headed by Prime Minister Narendra Modi has approved the proposal for grant of permission to HDFC Bank to raise additional share capital of up to a maximum of Rs 24,000 crore, including premium, over and above the previous approved limit of Rs 10,000 crore, such that the composite foreign shareholding in the Bank shall not exceed 74% of the enhanced paid-up equity share capital of the bank, said PIB (Press Information Bureau) in a press release. "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 in the Cabinet meet.
The decision would ensure that the composite foreign shareholding in the bank inclusive of all types of foreign investments, both direct and indirect, will not exceed 74 per cent of the enhanced paid-up equity share capital of the bank. It will be subject to Foreign Direct Investment (FDI) Policy conditionalities and other sectoral regulations/guidelines, reads the PIB release.
Currently, the FDI in the banks stands at 72.62 per cent. Of the additional Rs 24,000 crore, Rs 8,500 crore is proposed to be allotted to HDFC Ltd, the promoter, on a preferential basis.(With IANS and PTI inputs)