HDFC Bank ADR up 3.5%; HDFC Bank’s Weight in MSCI Index May Rise

HDFC Bank ADR shot up more than 3.5% in the Tuesday trading session of the New York Stock Exchange. This rally was driven by expectations that the weighting on the MSCI Index could double in the August reshuffle. 

Foreign Institutional Investors' stakes in HDFC Bank declined below 55% in the June 2024 quarter. The change in MSCI weighting could lead to a fresh inflow of $4 billion from passive funds. 

The legroom for foreign investors holding in the HDFC bank has now increased to 25.9%, against the MSCI requirement of 25% for increasing the weighting. 

Currently, HDFC Bank's weighting in the MSCI EM Index is around 3.8%. After the rejig, this could rise to 7.2-7.5%, potentially bringing in $3.2 billion to $4 billion in inflows. 

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FII Previous Stakes in HDFC Bank

As of March-end, FIIs held a 55.54% stake in HDFC Bank, and a fall below 55% would allow an FII headroom of 25%, causing the half-factor to move to full. 

The MSCI August review will be announced on August 13, and the adjustment will occur on August 30.

How HDFC Bank's Share Price Reacted?

In Indian exchanges, NSE & BSE, HDFC Bank's share price on Monday, July 2, 2024, traded positively and closed at an all-time high level of Rs 1,734 with an intraday rise of 1.49%.

In Tuesday's session,  HDFC Bank's share price showed a massive gap up open around 3% and hit a new all-time high level. Due to this, the Bank Nifty Index also surged higher and regained the 53000 level. Currently, Bank Nifty Index is trading at Rs 53,084 with a gain of 1.80%.

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