Centre Grants IDFC First Bank Exemption from 30% Shareholding Cap in Niraj Kakad Constructions
Centre allows IDFC First Bank to hold over 30% stake in Niraj Kakad Constructions, easing investment rules to boost infrastructure growth
The Ministry of Finance issued Notification No. S.O. 3018(E) dated July 7, 2025, granting IDFC First Bank an exemption from the 30% shareholding cap in Niraj Kakad Constructions Private Limited. This will allow IDFC First Bank to hold a stake exceeding 30% of the paid-up capital in the construction company, which is otherwise restricted under Section 19(2) of the Banking Regulation...
The Ministry of Finance issued Notification No. S.O. 3018(E) dated July 7, 2025, granting IDFC First Bank an exemption from the 30% shareholding cap in Niraj Kakad Constructions Private Limited. This will allow IDFC First Bank to hold a stake exceeding 30% of the paid-up capital in the construction company, which is otherwise restricted under Section 19(2) of the Banking Regulation Act, 1949.
Under normal conditions, Section 19(2) of the Banking Regulation Act restricts banks in India from holding shares in any company exceeding 30% of that company’s paid-up capital, ensuring that banks remain focused on their core business and manage their risks prudently.
In this case, the Central Government, on the recommendation of the Reserve Bank of India, has decided to relax this rule specifically for IDFC First Bank in relation to its investment in Niraj Kakad Constructions.
The exemption is effective immediately from the date of publication in the Official Gazette and will remain valid until July 7, 2030, unless withdrawn earlier. This means that IDFC First Bank can now legally hold and manage a higher stake in Niraj Kakad Constructions without violating banking norms, providing flexibility in managing its investment portfolio.
About Niraj Kakad Constructions
Niraj Kakad Constructions Private Limited is a private construction and infrastructure development company engaged in executing a variety of civil engineering projects in India. The company focuses on delivering projects in sectors such as roads, bridges, highways, urban infrastructure, residential and commercial real estate, and industrial structures.
The company’s operational approach often involves leveraging modern construction technologies and sustainable practices to reduce environmental impact and improve project efficiency. By focusing on disciplined financial management and operational excellence, Niraj Kakad Constructions aims to maintain a stable and scalable growth trajectory in the competitive infrastructure sector.
Its partnership with IDFC First Bank, now supported by the recent exemption from the 30% shareholding cap, may allow the company to secure long-term capital and enhance its operational capacity, further strengthening its role in India’s infrastructure landscape.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
