HDFC Bank Shares Rise Following RBI Approval for LIC Stake Increase

Shares of HDFC Bank moved up nearly 2 percent from a recent 52-week low after the Reserve Bank of India cleared Life Insurance Corp to raise its stake in the lender to 9.99 percent. Concurrently, the bank is looking to raise at least $500 million through dollar bonds via its GIFT City branch.

HDFC Bank shares rose nearly 2 per cent on Thursday from the 52-week low recorded in the previous trading session, following the Reserve Bank of India's approval allowing Life Insurance Corp (LIC) to increase its stake in the private lender to up to 9.99 per cent. The stock had previously hit a 52-week low of ₹715.10 in the prior trading session.

The central bank's approval was disclosed by HDFC Bank in an exchange filing late on Wednesday. According to the filing, LIC held a 4.11 per cent stake in HDFC Bank as of August 14.

In addition to the equity update, HDFC Bank is tapping the dollar bond market for the second time in two months. Reuters reported that the lender is looking to raise at least $500 million each through three-year and five-year bonds via its GIFT City branch. This fundraising initiative comes as banks seek to complete overseas fundraising before a special central bank FX swap window closes.

At around 10:16 am, the stock was up 1 per cent to ₹727.55 on the NSE, after reaching ₹728.30. Trading volume stood at 49.50 lakh shares, with a traded value of ₹359.72 crore. Over a one-week period, the stock was up 0.27 per cent, though it remained down 6.51 per cent over one month, 26.66 per cent year-to-date, and 26.87 per cent over one year.

The private lender previously completed its first-ever 1:1 bonus share issue in August 2025. The stock price adjusted to account for the doubled share count while leaving the total portfolio value unchanged. On the ex-date for the bonus issue, August 26, 2025, the stock was valued at ₹972.30, before falling by over 26 per cent to its recent 52-week low of ₹715.10 on August 19, 2026.

Meanwhile, a recent report from Kotak Institutional Equities indicated that the re-rating of HDFC Bank plays a key role in valuation discovery for the banking sector. The brokerage noted a sharp re-rating in mid-tier private banks and regional banks, though it flagged regional bank valuations as expensive given their loan mix concentration in gold loans, and pointed to a relatively weak RoE profile for mid-tier banks.

Kotak Institutional Equities stated a preference for frontline private banks, including HDFC Bank and ICICI Bank, alongside SBI in the public sector, adding that HDFC Bank's valuation currently acts as an anchor for sector valuations.

"Regulatory approvals for major institutional stakeholders like LIC help stabilize investor sentiment during periods of stock price correction. Furthermore, HDFC Bank's parallel move to tap the dollar bond market via its GIFT City branch demonstrates active capital management strategies amidst shifting foreign exchange windows. For the broader financial sector, frontline banks continue to serve as valuation anchors as institutional investors navigate varying risk profiles across mid-tier and regional lenders." — Dr. Shishir Gupta, Founder & CEO, StartupLanes