After the removal of constraints by RBI the stock raised to 9.5%, overseas investors willing to pay dollars for HDFC
The Reserve Bank of India has removed constraints which it has imposed on HDFC with an immediate effect and now the Overseas investors can now buy more shares in HDFC bank.
As per the FDI policy, foreign investment in, FPIs can buy up to 74 per cent while Indian banks is capped at 75 per cent stake in the stock through the stock exchange platformThe aggregate foreign shareholding through GDR/ADR/FPIS/FIIS/NRIS/PIOS in HDFC bank have gone below the approved limit stipulated under the extant FDI Policy, RBI said in a notification.
In the last week, HDFC Bank ADR was trading at 10 per cent premium to the domestic market. Also, the healthy premium of stock commands is up to 12 per cent in FPI-to-FPI trades.After the removal of restrictions by RBI there was a sharp surge in the stock which clearly depicts that, the foreign investors are willing to pay top dollar for HDFC Bank. The restraints placed on the purchase of shares of the company are introverted with immediate effect,” RBI said.
In a notification, Reserve Bank of India said, it also included Equitas Small Finance Bank and Capital Small Finance Bank in a schedule of RBI Act, 1934
By portfolio investment scheme (PIS) the FIIs, NRIs and PIOs (Persons of Indian Origin) can invest in primary and secondary capital markets in India .
RBI observers the ceilings on FII/NRI/PIO investments in Indian companies on a daily basis and has fixed the cut-off points two percentage points below the actual ceiling.
The promoter shareholding till the quarter ended December 31, 2016 in the bank was at 26.09 per cent. Stock of HDFC Bank today closed 0.37 per cent higher at Rs 1327.35 on BSE.
The bank still ended as the second-most valuable stock, with a market capitalisation of Rs 352,314 crore, overtaking Reliance Industries’ Rs 348,829 crore.