New Delhi, Sept. 19: The Foreign Investment Promotion Board (FIPB) has approved the raising of foreign holding in Axis Bank to 62 per cent from 49 per cent.
However, the approval comes with a rider that the holding of foreign institutional investors (FIIs) should not exceed 49 per cent, sources said.
The proposal to raise the foreign equity holding in the bank was cleared at an FIPB meeting chaired by economic affairs secretary Arvind Mayaram.
At present, the FII holding in the bank is 40.7 per cent, while domestic institutional investors have 8.77 per cent.
Axis Bank had approached the FIPB last month after the RBI said the limit of investments through global depository receipts (GDRs), American depository receipts (ADRs), FDI, NRI and FIIs in the bank had breached the overall limit of 49 per cent of its paid-up capital.
The FIPB also cleared HCL Technologies’ proposal to hike foreign direct investment (FDI) limit in the company to 74 per cent from 49 per cent.
FDI in the IT sector is under automatic route. But the country’s fourth largest software services exporter had to approach the FIPB for clearance as the investment will impact its wholly owned telecom subsidiary HCL Connet System & Services.
The board also cleared Shantha Biotechnics’s proposal to buy out the entire minority shareholding in the company and raise promoter stake to 100 per cent from 97 per cent.
“The proposal of Shantha Biotechnics has been cleared. This will entail a foreign investment of Rs 755 crore,” the source said.
The board reviewed 32 proposals, including six in the pharma sector. The proposal of Kinedex Healthcare and Laurus Labs were deferred, sources said.