As Tata AMC receives RBI approval to increase its stake in the lender, DCB Bank shares rise 8%

Following regulatory approval for Tata Asset Management Company (AMC) to raise its interest in the lender, the company’s shares of DCB bank increased by about 8% in early trade on Thursday. The bank’s stock price increased by as much as 7.98% to an intraday high of Rs 131.15 per share on the BSE.

“We would like to inform you that the Bank has received an intimation from RBI on July 5, 2023, that it has granted its approval to Tata Asset Management Private Limited (TAMPL) to acquire aggregate holding of up to 7.5 percent of the paid-up equity capital of the Bank through the schemes of Tata Mutual Fund,” DCB Bank stated in an exchange filing.

After the date of the RBI letter, the permission is good for a year.

Additionally, the RBI instructed Tata AMC to make sure that its total stake in the DCB Bank would never go beyond 7.5% of the bank’s paid-up capital.

The stock went up 6.2 percent to Rs 129 at 9.31 am on the BSE. The stock has also increased 63% during the last 12 months.

“The stock has seen a respectable retreat from the key 116 levels of the 200 period MA and 50 EMA, which has enhanced the bias to expect a further climb in the next days. The RSI has also shown strength to signify a trend reversal and is presently in a strong position with plenty of upside potential to continue the momentum even higher, according to local brokerage house Prabhudas Lilladher.

Prabhudas advised purchasing and accumulating the stock with a stop loss of 116 and an upside target of 142.