ICICI Prudential AMC Gets RBI Nod for AU SFB Stake

Research Analyst: UJVIN NEVATIA (PROPRIETOR: NEVAT INVESTMENTS) | SEBI Registration No.: INH100009628 ICICI Prudential Asset Management Company (

) has received approval from the Reserve Bank of India (RBI) to acquire an aggregate holding of up to 9.95% in AU Small Finance Bank. The approval covers the paid-up share capital or voting rights of AU Small Finance Bank. It applies to ICICI Prudential AMC, schemes of ICICI Prudential Mutual Fund, funds under its alternative investment funds and clients of its portfolio management services. What Does “Aggregate Holding” Mean? Aggregate holding refers to the combined ownership held across the entities covered under the approval. The 9.95% limit applies to the total holding, rather than allowing each covered entity to independently acquire 9.95%. The RBI approval is also an enabling clearance. It does not mean that ICICI Prudential AMC or the associated funds have already acquired the entire 9.95% stake. Why Does This Matter? For ICICI Prudential AMC, the approval provides regulatory headroom to increase exposure to AU Small Finance Bank through its mutual fund, alternative investment fund and portfolio management activities. For AU Small Finance Bank, the development could broaden its institutional investor base. However, any acquisition remains subject to applicable provisions of the Banking Regulation Act, RBI directions, FEMA, SEBI regulations and other laws. The development also highlights how RBI approval plays an important role when large institutional investors seek significant ownership in banking companies. Source: NDTV Profit No Recommendations