Cabinet approves raising foreign investment to 62% in Axis Bank
The Cabinet Committee on Economic Affairs (CCEA) has given nod to the proposal of Axis Bank for hiking foreign investment from 49% to 62% entailing an inflow of about Rs 7,250 crore. It will be subject to the aggregate foreign institutional investors holding not exceeding 49% of the paid up equity share capital of the bank.
What would be the effect of the hike in foreign investment in Axis Bank?
As a result of the inflow and increase in stake by foreign investors, the bank will turn into foreign-owned, whereby every future investment in seven subsidiaries will be governed by the FDI (Foreign Direct Investment). According to the FDI policy, downstream investment by an Indian company, which is not owned and/or controlled by a resident entity/ies into another Indian company would be in accordance or compliance with the relevant sectoral conditions on entry route. The bank’s seven subsidiaries are Axis Capitals, Axis Finance Pvt Ltd, Axis Private Equity ltd, Axis Trustee Services Ltd, Axis Asset Management Company, Axis Mutual Fund Trustee Ltd and Axis UK Ltd.