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Business News/ Markets / Stock Markets/  HDFC Bank Group stocks open in red post RBI's IndusInd Bank stake-buy nod
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HDFC Bank Group stocks open in red post RBI's IndusInd Bank stake-buy nod

The RBI has approved HDFC Bank's proposal to acquire aggregate holding of up to 9.50% in the paid-up share capital or voting rights of IndusInd Bank

Stock market today: Shares of HDFC Bank and IndusInd Bank are trading flat in early morning session on Tuesday. (Photo: Reuters)Premium
Stock market today: Shares of HDFC Bank and IndusInd Bank are trading flat in early morning session on Tuesday. (Photo: Reuters)

Stock market today: Despite the Reserve Bank of India's (RBI's) approval of the HDFC Bank Group's plans to acquire aggregate holding of up to 9.50 percent in the IndusInd Bank, shares of IndusInd Bank and HDFC Bank are trading flat in the early morning session. 

IndusInd share price today opened upside and went on to touch an intraday high of 1548.90 apiece level on BSE, logging marginal rise against Monday's close of 1539.25 per share on BSE. However, HDFC Bank share price is trading red after touching an intraday low of 1438.85 per share on BSE.

Why IndusInd Bank, HDFC Bank shares trade flat?

On why the market remained non-reactive to this big corporate development, Saurabh Jain, Vice President — Research at SMC Global Securities said, “This non-reaction of the Indian stock market to this institutional buying can be attributed to three major reasons — weakness in the market, IndusInd Bank shares already near record high, and speculative buying ahead of the RBI's  nod."

Saurabh Jain of SMC Global Securities maintained that the market was well aware of the institutional buying and speculative buying that had already taken place in both stocks. So, further appreciation in IndusInd Bank shares is limited. The rest of the reason lay with the weak stock market sentiments in which investors avoid shares that are not at a discounted price.

Triggers that failed

The central bank of India approved HDFC Bank's proposal to acquire "aggregate holding" of up to 9.50 percent in the paid-up share capital or voting rights of IndusInd Bank. The approval, granted through an RBI letter dated February 5, 2024, is based on HDFC Bank's application to the central bank.

However, the RBI has made it clear that if HDFC Bank Group fails to acquire a major shareholding within one year from the date of the RBI letter, the approval will be cancelled.

Disclaimer: The views and recommendations above are those of individual analysts, experts, and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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ABOUT THE AUTHOR
Asit Manohar
Chief Content Producer at Live Mint Digital Team
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
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Published: 06 Feb 2024, 09:23 AM IST
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