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Synopsis: HDFC Bank is poised to attract approximately $1.8 billion in inflows in the second phase of MSCI’s November 2024 rebalancing. This follows the initial weight increase in August, where MSCI made an exception, resulting in significant foreign investment. With FPI holdings stable and above the 20% threshold, HDFC Bank stands to benefit further from increased global investor interest.
In the upcoming MSCI November 2024 index rebalancing, HDFC Bank is expected to see significant foreign investment inflows, potentially reaching $1.8 billion. This development comes after MSCI’s August 2024 adjustment, which included an eagerly awaited weight increase for HDFC Bank. The MSCI made an exception by raising the stock’s weight with a lower adjustment factor, resulting in an initial $1.8 billion inflow, equivalent to approximately 93 million shares. The second phase of this adjustment is expected in November, provided that the foreign institutional investor (FII) headroom remains above 20%, which is likely as per the bank’s recent shareholding update.
HDFC Bank's foreign portfolio investor (FPI) holdings currently stand at 48.01%, with prominent stakeholders including the Government of Singapore, Vanguard Total International Stock Index Fund, and Government Pension Fund Global. The stable FII headroom, in conjunction with the MSCI adjustments, positions HDFC Bank well to attract additional foreign investments, enhancing the bank's market visibility and liquidity.
Despite this positive outlook, HDFC Bank’s shares experienced a slight dip of 0.49% in early October, as the bank reported a modest 7% growth in gross advances and a 15.1% year-on-year increase in deposits for the September quarter.
Disclaimer: This article is for informational purposes only and should not be construed as financial advice. Please consult a financial professional before making investment decisions.
