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The Foreign Investment Promotion Board (FIPB) today approved a proposal of Axis Bank to increase the limit on overseas holdings in the lender to more than 49%.
The proposal was cleared at an FIPB meeting chaired by Economic Affairs Secretary Arvind Mayaram, sources said.
The FIPB approved raising the foreign equity holding in Axis Bank to 62% from 49%, subject to the condition that the holding of foreign institutional investors does not exceed 49%.
At present, the FII holding in the bank is 40.7% while domestic institutional investors have 8.77%.
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% of its paid-up capital.
Shares of Axis Bank closed at Rs 1,140.25, up 5.56% on the BSE.
FIPB, headed by Economic Affairs Secretary Arvind Mayaram, also cleared HCL Technologies' proposal to hike Foreign Direct Investment (FDI) limit in the company to 74% from 49%.
Although FDI in IT sector is under automatic route, however, HCL Tech had to approach the FIPB to seek clearance as the investment would impact its wholly-owned telecom subsidiary HCL Connet System & Services, sources said.
Further, the Board also cleared the proposal of Shantha Biotechnics proposal to buy out the entire minority shareholding in the company and raise promoter stake to 100% from 97% at present.
"The proposal of Shantha Biotechnics has been cleared. This would entail a foreign investment of Rs 755 crore," the source added.
The board took up as many as 32 proposals, including six in the pharma sector, for hiking foreign investment limit.
The proposal of Kinedex Healthcare and Laurus Labs were deferred, sources said, adding that the application of Korea's SD Bio Standard Dignostic to infuse USD 5 million into a domestic company was cleared.
