HDFC Bank Hits 52-Week High as FII Holding Falls Below 55%, Eyes $4B Inflows 

HDFC Bank shares hit a 52-week high as FII holding fell below 55%, potentially increasing MSCI Index weight and attracting $3-4 billion in inflows. Q4 profits rose significantly.
HDFC Bank Hits 52-Week High as FII Holding Falls Below 55%, Eyes $4B Inflows 

HDFC Bank shares hit a 52-week high, driven by a drop in Foreign Institutional Investor (FII) holding below 55%, which is expected to increase the bank’s weight in the MSCI Index. The FII ownership in HDFC Bank decreased to 54.83% as of June 2024, opening the door for potential inflows of $3-4 billion due to the MSCI requirement of keeping FII investment below 55.5%. The bank’s weight in the MSCI Index is projected to rise from 3.95% to 7.2-7.5%, with the rebalancing announcement expected in August.

In the fourth quarter of fiscal year 2024, HDFC Bank reported a consolidated profit after tax of ₹17,620 crore, a 39.9% increase year-over-year. On a standalone basis, the profit was ₹16,510 crore, up 37.1%. The bank’s net revenue grew by 47.3% to ₹47,240 crore, driven by transaction gains from a stake sale in HDFC Credila Financial Services. Net interest income for the quarter rose 24.5% to ₹29,080 crore, with a core net interest margin of 3.44% on total assets.

Shares of HDFC Bank have gained nearly 2% since the beginning of the year and 0.48% over the last year. The recent drop in FII holding is expected to significantly boost the bank’s MSCI Index weight, potentially attracting substantial passive fund inflows. The share price opened 3.5% higher at ₹1,791 on the NSE, reflecting positive market sentiment.

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