HDFC Bank’s weightage in FTSE indices to be increased in 3 tranches: FTSE

MUMBAI – HDFC Bank’s investability weightage in FTSE Emerging All Cap index has increased to 1.52% from 0.81%, following the merger of parent Housing Development Finance Corporation. However, the weightage will be implemented in three tranches by March 2024, index aggregator FTSE Russell said.

The first tranche will be implemented in the September index review, the second one in the December review, and the last in March, FTSE said.

“FTSE Russell has considered client feedback on the significant size of the projected upweight and the potential impact to the company’s foreign headroom, if the shares in issue and free float update are implemented in their entirety on a one-off basis at the September review,” the index aggregator said in a release.

In its September review, FTSE will evaluate the eligibility status of HDFC Bank, which includes a review of its shares in issue, free float, and foreign headroom.

Based on the shares and free float cut-off date on July 31, HDFC Bank’s total shares in issue is over 754 crore, the investability weighting is 74%, and the foreign headroom is 18.3%, which satisfies the minimum foreign headroom requirement for an index constituent.

Foreign investment permissible limit for HDFC Bank is at 74%, as per Reserve Bank of India norms. As per the period ended July 14, category-I foreign portfolio investors held 50.54% stake in HDFC Bank.

Last month, HDFC Bank replaced HDFC Ltd in the FTSE Global Equity indices following the completion of the merger, but the index aggregator had said it will review the eligibility criteria for the same in its next quarterly review meeting. In trade on Monday, shares of HDFC Bank ended 0.1% down at Rs 1,651.25 on the National Stock Exchange.

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