Shares of HDFC Bank rose over 3 per cent to hit an all-time high of ₹1,791 per share today (July 3). This comes following a 4 per cent rally of its American Depository Receipts (ADRs) to $66.9 apiece post the release of June shareholding data. In HDFC, foreign investors’ stake fell below 55 per cent in the June quarter which indicates a potential doubling of the bank’s weighting in the MSCI Standard index during the upcoming reshuffle.
As per BSE data, foreign institutional investor (FII) ownership in HDFC Bank stood at 54.8 per cent as of the end of June 2024- below the 55 per cent mark which could allow further MSCI inflows during the August 2024 rebalancing.
In the past three months, HDFC Bank stock has gained more than 16 per cent, outperforming the benchmark Nifty 50 index, which rose by 7 per cent. Although, HDFC Bank has underperformed so far this year increasing only 1.7 per cent.
UBS forecast between $3-6.5 billion in future buying, partly reflected in the recent rally as the brokerage firm maintains a ‘Buy’ rating on HDFC Bank with a target price of ₹1,900 per share.
Jefferies said that the reduction in FII stake could help MSCI raise the threshold of the foreign inclusion factor from 50 per cent to 100 per cent. The brokerage firm maintained a ‘Buy’ rating on HDFC Bank stock with a target price of ₹1,880 per share.
