Axis, Federal Bank seek FIPB nod to raise foreign holdings By Falaknaaz Syed Aug 20 2013 , Mumbai Tags: News Axis Bank the country’s third largest private sector bank has filed an application with the Foreign Investment Promotion Board (FIPB) for increasing the foreign shareholding limit in the bank up to 62 per cent. On the same lines, Federal Bank too would be filing an application with FIPB to increase the foreign shareholding limit in the bank to 74 per cent. Both banks have crossed the foreign shareholding limit of 49 per cent. On August 14, 2013 the Reserve Bank of India (RBI) notified that the foreign shareholding in Axis Bank has crossed the overall limit of 49 per cent of its paid-up capital and said that no further purchases of shares of the bank would be allowed through stock exchanges in India on behalf of foreign investors. In a similar move, the RBI on Tuesday notified that foreign share holding by foreign institutional investors (FIIs)/non-resident indian (NRI)/persons of Indian origin (PIO)/foreign direct investment (FDI)/American depository receipt (ADR)/global depository receipt (GDR) in Federal Bank has crossed the overall limit of 49 per cent of its paid-up capital. “Therefore, no further purchases of shares of this bank (Federal Bank) would be allowed through stock exchanges in India on behalf of FII/NRI/PIOs,” said RBI. Shikha Sharma, MD and CEO of Axis Bank told Financial Chronicle, “We have asked for a 13 per cent increase in foreign shareholding. A few years back with the shareholders approval, the bank had issued GDRs of 13 per cent. But after this, the RBI issued a notification that said that GDR would also be included in the foreign direct investment limit. Therefore we have asked FIPB for treating the GDRs (already issued) under the FDI limit.” D Sampath, CFO, Federal Bank said, “We have shareholder approval to increase the foreign shareholding limit up to 74 per cent. We will be seeking a FIPB approval to increase the foreign shareholding limit from 49 per cent to 74 per cent.” Axis Bank has on August 19 applied to the FIPB for increasing the foreign shareholding limit. The foreign shareholding in Axis Bank as on June 30, was 48.96 per cent and this includes investments through the FDI route in the form of GDRs of 8.08 per cent and other foreign holdings including FIIs of 40.88 per cent.
Posted on: Fri, 23 Aug 2013 17:51:59 +0000
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