As the country faces yet another round of nationwide lockdown, the Reserve Bank of India has asked Financial services company Housing Development Finance Corporation Ltd (HDFC) to decrease its stakes by 50 percent in its branches of HDFC life insurance and HDFC Ergo.
In January, the board of directors of HDFC Ergo and HDFC Ergo Health approved a scheme of amalgamation between the two bodies. Post merge, HDFC is authorized to hold a 50.58 percent stake in HDFC Ergo. As per RBI orders, the corporation is expected to reduce its stake in HDFC Ergo within six months from the date of the merger.
As for the reduction of stakes in HDFC life insurance corporation, the company has to complete the process by December 16, 2020. The stake has to be lowered by 50 percent or below from the current 51.43 percent.
On Monday, the Indian indices opened lower with Nifty below 9100 levels. Even Sensex saw a drastic plunge post the announcement of extending the lockdown till May 31. There was a drop in the Indian rupee against the US dollar as it opened at 75.84 against Friday’s close of 75.57, facing a 27 paise low. At 12.39 IST, Sensex was down 836.90 points or 2.69 percent at 30,260.83, and Nifty 50 saw a reduction by 245.30 points or 2.68 percent at 8891.55.
Amidst the drop in stock prices faced by many corporations, the shares of defence companies saw a rise by 4 to 10 percent owing to the government’s decision to make defence products in India under ‘Make in India’ mission. After the government announced to open the mining sector for private companies, the shares of Coal India Ltd (CIL) also fell by 6 percent in the open market.
The aviation industry is said to have faced major crises by the pandemic across the globe. The indices were dragged by banking stocks which included HDFC Bank, ICICI Bank, Axis Bank, HDFC, and Kotak Bank in the index.