HDFC Bank’s weightage on FTSE indices to be increased in three tranches by March, says FTSE

8 Aug 2023 , 09:55 AM

Following the merger of parent Housing Development Finance Corporation, HDFC Bank’s investability weightage in the FTSE Emerging All Cap index grew to 1.52% from 0.81%. The weightage, however, will be introduced in three tranches by March 2024, according to index aggregator FTSE Russell.

FTSE said that it will implement the first tranche in the September index review, the second in the December review, and the third and final in March.

‘FTSE Russell has taken into account client feedback on the significant size of the anticipated upweight and the possible impact on the company’s foreign headroom if the shares in issue and free float update are put into effect in their entirety on a one-time basis at the September review,’ the index aggregator said in a release.

FTSE will analyze HDFC Bank’s qualifying status in its September review, which will involve a review of its shares in issue, free float, and foreign headroom.

Based on the July 31 share and free float cut-off date, HDFC Bank has over 754 crore shares in issue, an investability weighting of 74%, and foreign headroom of 18.3%, which meets the minimum foreign headroom criteria for an index constituent.

Following the completion of the merger, HDFC Bank replaced HDFC Ltd in the FTSE Global Equity indexes last month, but the index aggregator has stated that it will reassess the eligibility requirements for the same in its next quarterly review meeting.

At around 9.51 AM, HDFC Bank was trading 0.45% lower at Rs 1,643.75 per piece, against the previous close of Rs 1,651.25 on NSE.

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