The first phase will be implemented during the September index review, followed by the second phase in the December review, and the final phase in March.
“FTSE Russell has taken into account client feedback regarding the significant size of the projected upweight and the potential impact on the company’s foreign headroom if the shares in issue and free float update are fully implemented in a one-off manner during the September review,” stated the index aggregator in a release.
During its September review, FTSE will evaluate the eligibility of HDFC Bank, including a review of its shares in issue, free float, and foreign headroom.
Based on the shares and free float cut-off date of July 31, HDFC Bank has over 754 crore total shares in issue, a 74% investability weighting, and an 18.3% foreign headroom, which meets the minimum foreign headroom requirement for an index constituent.
As per the Reserve Bank of India norms, the foreign investment permissible limit for HDFC Bank stands at 74%. As of July 14, category-I foreign portfolio investors held a 50.54% stake in HDFC Bank.
Last month, HDFC Bank replaced HDFC Ltd in the FTSE Global Equity indices following the completion of the merger. However, the index aggregator stated that it will reassess the eligibility criteria for this change in its next quarterly review meeting. In trading on Monday, HDFC Bank’s shares closed 0.1% lower at Rs 1,651.25 on the National Stock Exchange.
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