MSCI to increase HDFC Bank’s weightage in Global Standard Index in 2 tranches

The second and final tranche is expected to be done in the November 2024 rejig if there is remains a foreign room of at least 20%.

MSCI said that the India’s largest private lender HDFC Bank’s weightage will be increased in the Global Standard Index. This will happen in 2 tranches and MSCI has made an exception by raising with lower adjustment factor leading to an inflow of $1.8 billion equivalent to 93 million shares with an impact of about 4.5 days in August Rejig.

The headquarters of India's HDFC bank is pictured in Mumbai. (Reuters)

The second and final tranche is expected to be done in the November 2024 rejig if there is remains a foreign room of at least 20%. The timeline of the second tranche has not yet been communicated. MSCI said in its note, “MSCI will maintain HDFC BANK in MSCI Indexes with an increase in the Foreign Inclusion Factor (FIF) from 0.37 to 0.56 as of the close of August 30, 2024 (effective September 2, 2024) coinciding with the August 2024 Index Review."

At present, Nuvama said in its report that HDFC Bank's weight in the MSCI EM Index is around 3.8% and after rejig this could jump to 7.2%-7.5%.

“Domestic funds have been consistent buyers of HDFC Bank, while FII flows into India have picked up, potentially indicating purchases of private banks, particularly HDFC Bank,” Nuvama said.

It added, “Domestic funds have been consistent buyers of HDFC Bank, while FII flows into India have picked up, potentially indicating purchases of private banks, particularly HDFC Bank."