Axis Bank gets nod for foreign shareholding of 74 per cent

One of the country’s finest and third largest private bank, Axis Bank has finally got a approval to raise the Foreign shareholding from 62 to 74 per cent. The 12 per cent hike is expected to bring Rs 13000 crores.

The cabinet committee on economic affairs finally gave approval on July 5 to raise the limit. On the other hand, the move is going to benefit in creating employment. The move will create 6,000 to 7,000 jobs over the next three years.
Last year, the Cabinet had removed the sub-limit within foreign shareholding, which earlier stated that FII investment should not form more than 49 per cent, out of the 74 per cent. Axis Bank’s proposal to raise foreign shareholding was forwarded by the Foreign Investment Promotion Board to the CCEA as the capital inflow was more than Rs 5,000 crore. With this approval Axis Bank will be the largest private sector bank holding such a high foreign shareholding.

The bank has reported a drop in net profit for the quarter ended 31 March 2016, the first in 46 quarters, as it set aside more money against bad loans and made a contingency provision of Rs.300 crore. Net profit fell by 1.22 per cent to Rs. 2,154.28 crore in the fiscal fourth quarter from Rs. 2,180.59 crore a year ago. Absolute gross non-performing assets (NPAs) reached were at Rs. 6,087.51 crore at the end of the March quarter from Rs. 5,724 crore at the end of the December quarter.