HDFC Bank’s FII headroom remains securely above the 20% mark, setting the stage for significant inflows. The second and final phase of the MSCI weight increase is expected to occur during the November 2024 rejig, potentially leading to inflows of approximately $1.8 billion, as per Nuvama.
The recent update on HDFC Bank’s shareholding and FII limit suggests that the bank is positioned well to benefit from increased foreign investment, given the substantial headroom above the 20% FII threshold. This aligns with the broader market expectations for increased foreign participation in HDFC Bank’s stock. Nuvama has projected that the stable FII headroom, along with the MSCI adjustments, will create a conducive environment for further inflows, offering potential growth in HDFC Bank’s market value and enhancing its liquidity.
The second phase of the MSCI index weight adjustment is part of the Bank’s larger growth strategy and reflects confidence in its performance. It is anticipated that this adjustment will increase the bank’s visibility among global investors, thus leading to a sizable inflow of funds as market participants realign their portfolios to reflect the new MSCI weights.
