FII holding in HDFC Bank drops further in Q2, investment headroom increases by 170 bps

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Key Points

The September quarter shareholding pattern disclosed by HDFC Bank showed that for the second time, post the mega-merger with parent HDFC Ltd, the foreign institutional holding has reduced...

As of September end, FIIs held a 59% stake in the private sector lender, and this increases the foreign investment headroom to 20% from 18.3% a quarter ago, pointed out Nuvama Alternative & Quantitative Research...

According to the current MSCI methodology, a stock's weight can double if the foreign headroom exceeds 25%...

Thus, more selling by FIIs is needed in the next few quarters before MSCI incorporates the merged entity shares with a factor of one, compared to the 0.5 currently used, said Abhilash Pagaria, Head - Nuvama Alternative & Quantitative Research...

The fall in the stock extended to October as it hit a 6-month low in trade on Wednesday but it rebounded smartly from that low and ended 1.4% higher at Rs 1,529.55, bucking the Nifty Bank index, which ended nearly 1% down...

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