HDFC Bank's Revised Free Float Implementation Split into Three Tranches: FTSE Russell

8 Aug 2023 , 11:11 AM

HDFC Bank’s revised free float, following its merger with Housing Development Finance Corporation (HDFC), will be implemented in three phases starting from September 2023, according to a notification by FTSE Russell on August 7.

The implementation plan involves tranches for September 2023, December 2023, and March 2024 index reviews, with the latter two dependent on the company’s foreign headroom meeting the minimum 10 % requirement.

Currently, HDFC Bank has 308.2 crore shares in the issue, with an investability weight of 95.9 %. The index shares amount to 295.8 crore.

• The first tranche in September will see 754.49 crore shares in issue, with an investability weight of 74 %, and index shares of 383.3 crore. The tranching factor at this stage is set at 33 %.
• In the second tranche in December 2023, the tranching factor will rise to 66 %, shares in issue will remain at 754.49 crore, investability weight at 74 %, and index shares at 470.8 crore.
• The third tranche in March 2024 will have a tranching factor of 100 %, index shares at 558.3 crore, shares in issue at 754.49 crore, and investability weight at 74 %.

FTSE Russell took client feedback into account, considering the significant size of the projected upweight and its potential impact on the company’s foreign headroom. This led to the decision to implement the changes in three tranches. The HDFC-HDFC Bank merger, effective from July 1, resulted in the formation of a $172 billion merged bank entity, ranked fourth in global equity market capitalization. As a result, HDFC shares were delisted from Indian bourses on July 13.

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