HDFC Bank Share: Stock up 4%, adds 38K in m-cap
At the BSE, the stock increased 3.54% to a high of R 1,791.90. As of the end of June, HDFC Bank held an 11.95 percent weight in the Nifty. In early trading, the stock contributed to an increase in the index of 128.70 points, or 0.53%, to 24,252.55. The expected rise in deposits is between Rs 50,000 and Rs 55,000 crore, with an additional 90% of LDR.
In anticipation of a rise in the stock’s MSCI weight, HDFC Bank shares increased by almost 4% on Wednesday, bringing the private lender’s market capitalization (m-cap) to roughly Rs 38,000 crore. Analysts predict that HDFC Bank’s weighting in the MSCI Global Standard index might treble in the August MSCI rejig, resulting in nearly $3 billion in passive inflows for the counter, as the lender disclosed its June quarter shareholding pattern.
BSE Stocks
At the BSE, the stock increased 3.54% to a high of R 1,791.90. As of the end of June, HDFC Bank held an 11.95 percent weight in the Nifty. The stock contributed to the index’s 128.70 point increase, or 0.53%, to 24,252.55.
“The stock (25.9% headroom against requirement of 25%) has been favored by the foreign stake in HDFC Bank, perhaps resulting in a weight doubling in the MSCI August 2024 review. At the moment, HDFC Bank makes up about 3.8% of the MSCI EM Index. According to Nuvama Alternative & Quantitative Research, this might increase to 7.2–7.5% after the revision, potentially bringing in $3.2 billion to $4 billion in inflows over the course of six days (base case).”
The current methodology assumes that the increment occurs entirely at once. Only on August 13th will MSCI reveal any exceptions.
“As we have stated numerous times, we anticipate that the stock will increase in value and break the Rs 1,900 barrier before the formal announcement on August 13 (IST). Domestic funds should hold HDFCB because they purchased it at a fair price in an expensive market, according to Nuvama.
Based on fundamentals
Nuvama projects less than 2% quarterly increase in loans and deposits for HDFC Bank in Q1. The expected rise in deposits is between Rs 50,000 and Rs 55,000 crore, with an additional 90% of LDR.
“We are adjusting the loan mix and raising lending rates in Q4 of FY24, which will result in flat NIM. However, considering that the cost of new deposits has gone up and repricing of e-HDFC borrowings is still not producing any cost benefit, NIM is still an important variable to watch. In Q1FY25, Rs 15,600 crore worth of e-HDFC borrowings, primarily CPs, matured. Furthermore, there will be a typical e-HDFC deposit attrition,” it stated.
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