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Life Insurance Corporation of India (LIC), the country's largest insurer, has increased its stake in HDFC Ltd to over 5 per cent following the acquisition of shares from the open market.

LIC purchased 1.2 lakh shares from the open market hiking its stake in the company to 5.003 per cent, mortgage lender HDFC Ltd said in a regulatory filing on Monday.

LIC in a separate filing said the holding increased from 4.991 per cent to 5.003 per cent, an increase of 0.012 per cent at an average cost of 2,673.84 per unit. The insurer made the purchase on December 2, 2022, it added. LIC purchased additional shares at a total cost of about 57.2 crore.

Shares of the HDFC closed at 2,674.95, up by 0.35 per cent on the BSE. Before the acquisition, LIC held over 9.09 crore shares representing 4.991 per cent stake in the company.

Earlier in April, HDFC Ltd decided to merge with its banking subsidiary HDFC Bank. Touted as the biggest transaction in India's corporate history, HDFC Bank on April 4 agreed to take over the biggest domestic mortgage lender in a deal valued at about $40 billion, creating a financial services titan.

The proposed entity will have a combined asset base of around 18 lakh crore. The merger is expected to be completed by the second or third quarter of FY24, subject to regulatory approvals.

Once the deal is effective, HDFC Bank will be 100 per cent owned by public shareholders, and existing shareholders of HDFC will own 41 per cent of the bank.

This story has been published from a wire agency feed without modifications to the text.

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