HDFC Bank hit an intraday high of ₹727.80 on Thursday, after the Reserve Bank of India approved LIC’s plan to raise its stake to 9.99%.

In its filing on Wednesday, HDFC Bank said the RBI, through a letter dated August 19, had approved Life Insurance Corporation’s request to hold up to 9.99% of the bank’s paid-up share capital or voting rights.

That’s more than double what LIC currently owns. As of August 14, the insurer held 4.11% of HDFC Bank’s total share capital, leaving plenty of room before it gets anywhere near the new ceiling.

The approval isn’t unconditional either. HDFC Bank noted that LIC will still need to comply with banking regulations, foreign exchange rules and SEBI norms as it builds up its position over time.

This news comes just over a month after HDFC Bank released its first-quarter results for FY27.

Standalone net profit rose 5% to ₹19,060 crore, up from ₹18,155 crore in the same quarter last year, while net interest income grew nearly 7% to ₹33,536 crore. Asset quality slipped a touch compared with the previous quarter.

Gross non-performing assets edged up to 1.17% of advances from 1.15% in March, and net NPAs rose to 0.41% from 0.38% over the same period.

The bank’s net interest margin also touched a record low during the quarter, a trend that has weighed on the stock through much of this year.

The stake approval also comes amid a broader shift in who owns HDFC Bank. Mutual funds raised their holding to 30.62% in the June quarter, up from 29.54% in March.

Retail investors, mostly small shareholders holding up to ₹2 lakh worth of shares, together held a 10.32% stake as of the same quarter.

Foreign portfolio investors, meanwhile, have trimmed their holding in the bank for five quarters in a row.

As of 9:51 am, HDFC Bank shares were last trading at ₹726.00 up 0.83% on the NSE, still down sharply for the year so far but getting a lift on Thursday from the RBI’s approval for LIC.

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