HDFC Bank stocks rally as RBI approves LIC’s increased stake amid Q3 Challenges

HDFC Bank’s shares, facing pressure post-Q3 results, witnessed a 2% surge, reaching Rs 1,462 per share on January 29. The rally ensued after the Reserve Bank of India (RBI) granted approval for Life Insurance Corporation (LIC) to acquire an additional 4.8% stake in the bank, elevating its overall stake to 9.99%.

The bank’s stock had experienced a 14% decline following the disclosure of its December quarter results. Challenges such as margin strain, a decline in earnings per share (EPS), and slower-than-expected deposit growth contributed to the negative sentiment.


As per the exchange filing, RBI has set a deadline for LIC to acquire the additional stake by January 24, 2025. Furthermore, LIC is mandated to ensure that its total holding does not surpass 9.99% of the paid-up share capital or voting rights of HDFC Bank.

In the third quarter, HDFC Bank reported a 4% growth in net interest income (NII) on a quarterly basis, driven by a 4.9% sequential increase in gross advances. The net profit also saw a 2.5% uptick, supported by substantial treasury gains and favorable tax write-backs amounting to Rs 1,500 crore. Despite the recent challenges, the approval for LIC’s increased stake offers a positive turn for HDFC Bank’s market outlook.

As of 9:30 am the shares were trading 1.39% higher at ₹1,454.80