ICICI Pru AMC gets RBI nod to acquire 10% stake in RBL, Federal, IDFC FIRST Bank; stocks surge

Shares of Federal Bank, RBL Bank and IDFC FIRST Bank remained in focus today after the Reserve Bank of India (RBI) granted approval to ICICI Prudential Asset Management Company Limited (I-Pru AMC) and ICICI Prudential Life Insurance Company Limited (I-PruLife) for acquiring up to 9.95% stake in each of these three private lenders.

Shares of Federal Bank, RBL Bank rose 2.2% to ₹156.15 and 5.6% to ₹276.90, respectively, on the BSE today. However, shares of IDFC Bank dipped 0.9% to ₹88.15 apiece on the BSE.

The Federal Bank announced in an exchange filing on December 28, that the Reserve Bank of India (RBI) has granted approval to ICICI Prudential Asset Management Company Ltd. (ICICI AMC) to acquire a stake of up to 9.95% in the bank.

“The Federal Bank Ltd (“Bank”) has received an intimation from the Reserve Bank of India (“RBI”) on December 28, 2023, that it has accorded its approval to ICICI Prudential Asset Management Company Ltd.,” the statement says.

RBL Bank also released a statement stating that RBI granted approval to I-Pru AMC and ICICI Prudential Life Insurance Company Limited (I-PruLife) for acquiring a combined holding of up to 9.95% in the paid-up share capital or voting rights of RBL Bank Limited. The approval was given in response to the application submitted by I-Pru AMC and I-Pru Life to the RBI.

IDFC Bank also announced in its exchange filing on December 28 that RBI has permitted ICICI PruAMC and I-PruLife to acquire aggregate holding of up to 9.95% in the Bank. “The Bank has today received an intimation from the RBI, stating that it has accorded its approval to the Applicants to acquire stake of up to 9.95% of the paid-up share capital or voting rights of the Bank, subject to the conditions specified therein,” the filing notes.

The regulatory filing by Federal Bank stated that the approval from RBI is contingent upon adherence to the stipulated conditions. “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,” it adds.

These conditions include compliance with the relevant provisions of the Banking Regulation Act, 1949, as well as RBI's Master Direction and Guidelines on Acquisition and Holding of Shares or Voting Rights in Banking Companies, dated January 16, 2023.

“As per the RBI Letter, I-Pru AMC and I-Pru Life have been accorded the approval to acquire the aforesaid major shareholding in the Bank within a period of one year i.e. by December 26, 2024 and to ensure that the aggregate holding in the Bank does not exceed 9.95% of the paid-up share capital or voting rights of the Bank at all times,” the filing of RBL Bank states.

As per the statement, in case the aggregate holding drops below 5%, obtaining prior approval from the RBI will be necessary to raise it to 5% or beyond of the paid-up share capital or voting rights of the Bank.

“The 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 statutes, regulations and guidelines, as applicable,” IDFC Bank filing states.

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