New Delhi: Axis Bank will become a “foreign-owned” lender, to be governed by FDI policy, following the go-ahead to its proposed increase in foreign investment holding to 62 per cent, entailing inflow of over Rs 6,200 crore.
The proposal, which was cleared by the Foreign Investment Promotion Board recently, now requires a go-ahead from the Cabinet Committee on Economic Affairs as it envisages investment of over Rs 1,200 crore. The lender seeks to raise foreign investment holding from the existing 49 per cent to 62 per cent.
Following the hike in the stake by foreign investors, the bank will become foreign-owned, whereby every future investment in seven subsidiaries will be governed by the FDI policy, according to sources.
As per the FDI policy, downstream investment by an Indian company, “which is not owned and/or controlled by resident entities into another Indian company, would be in accordance or compliance with the relevant sectoral conditions on entry route”.
As of June this year, foreign institutional investment (FII) holding in the bank was 40.7 per cent, while global depository receipts (GDRs) total 8.08 per cent. The proposal to raise foreign investment limit by 13 per cent would attract inflows of Rs 6,265.76 crore (around $1 billion), sources said.
The promoters of the bank are LIC, GIC, New India Assurance, National Insurance Company and Administrator of Specialised Undertaking of the UTI.
