India’s largest insurer, Life Insurance Corporation (LIC), is set to significantly increase its holding in HDFC Bank, the country’s biggest private sector lender, after receiving approval from the Reserve Bank of India (RBI). The development, disclosed in a regulatory filing by HDFC Bank, is expected to influence investor sentiment around both stocks in the coming sessions.
LIC Stake in HDFC Bank to Rise to 9.99%
According to the stock exchange filing shared after market hours on Wednesday, HDFC Bank confirmed that the RBI has cleared LIC’s application to raise its shareholding in the bank through additional stake purchases. As per available reports, this approval allows the insurance giant to increase its stake in HDFC Bank to as much as 9.99%, marking a substantial jump from its current position.
Depository data shows that as of August 14, 2026, LIC held a 4.11% stake in HDFC Bank. With the RBI’s approval now in place, LIC has the regulatory green light to raise this holding by nearly 5.88 percentage points, taking its total stake in HDFC Bank close to the 10% mark. The application for this stake increase had been formally submitted by LIC to the central bank prior to the approval.
Impact on LIC and HDFC Bank Share Price
The news of LIC’s expanded stake in HDFC Bank could have a direct bearing on the movement of both stocks. LIC shares closed Wednesday’s session with a gain of 0.74%, settling at ₹413.05. The insurance stock has faced pressure in recent weeks, and this development around its increased holding in HDFC Bank may trigger renewed investor interest.
Meanwhile, HDFC Bank shares ended Wednesday marginally lower at ₹720.65. The banking stock has slipped nearly 8% over the past month and has seen a sharper decline of around 21% over the last six months amid ongoing market volatility, translating into a fall of roughly ₹192 per share in value. Market watchers will be closely tracking how both counters react in the sessions ahead, given the scale of LIC’s proposed stake increase in one of India’s leading private banks.