September 21, 2023
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HDFC AMC gets RBI nod to buy up to 9.5% stake in Karur Vysya Bank
Karur Vysya Bank Ltd, which has seasoned investors such as Ashish Dhawan, Mukul Agrawal and the Jhunjhunwala family as investors, is in focus on Thursday morning after the Reserve Bank of India (RBI) gave its approval to HDFC Asset Management Company (HDFC AMC) for acquiring aggregate holding of up to 9.5 per cent of the paid-up share capital or voting rights of bank. The approval has been granted with reference to the application made by HDFC AMC to RBI, Karur Vysya Bank told stock exchanges.
Data showed HDFC Trustee Company A/C (various funds) held 3,59,14,576 shares or 4.49 per cent stake in the bank, as on June 30. The Jhunjhunwala family held 4.50 per cent stake while Dhawan (1.3 per cent stake) and Agrawal (1.25 per cent) also held over one per cent stake in the bank at the end of June quarter.
“The aforesaid approval granted by RBI is subject to the compliance with the relevant provisions of the Banking Regulation Act, 1949, RBI’s Master Direction and Guidelines on Acquisition and Holding of Shares or Voting Rights in Banking Companies dated January 16, 2023 (as amended from time to time), provisions of the Foreign Exchange Management Act, 1999, regulations issued by Securities and Exchange Board of India, and any other guidelines, regulations and statutes as applicable,” Karur said.
That said, HDFC AMC has to ensure that the aggregate holding in the bank doesn’t not exceed 9.5 per cent of the paid-up share capital or voting rights of the Bank at all times.
What May be the Objective?
What is the objective of such investment is not known. HDFC AMC cannot form a banking company nor it can merge with KVB. Some analysts believe at later date KVB may be taken over by HDFC Bank and HDFC AMC may realise bumper gains on such takeover.
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