IndusInd Bank could see its weightage in the MSCI rise as FIIs offload their holdings in the private sector lender.
According to IndusInd Bank's September shareholding pattern, foreign portfolio investors have reduced their stakes substantially. From holding 59.62 percent as of June FY25, FIIs have cut their holding in the bank to 55.53 percent in September.
Nuvama Alternative & Quantitative Research noted that in terms of MSCI weight, the foreign headroom is now just below the critical 25 percent threshold, with MSCI currently applying a half-float factor.
The foreign headroom measures the percentage of shares still available for foreign investors to buy. If there the headroom crosses the 25 percent level, it means that there are more shares available for FIIs to buy.
"If FII holding decreases by just 0.03 bps, the foreign headroom will exceed 25 percent, potentially leading to a doubling of the bank's weight in MSCI during the February 2025 review," said the research firm. This would take the weight close to 58 basis points, up from 30 basis points currently.
The increase in weightage could result in inflows of approximately $290 million, translating to about 17 million shares, which would likely have an impact over 5 trading days, according to Nuvama Alternative Research.
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At 11.50 am, IndusInd Bank shares were quoting Rs 1,339.6 on the NSE, lower by 0.6 percent compared to the previous session's closing price.
The stock is trading at multi year lows. Over the past one year, shares of IndusInd Bank have fallen around 6 percent, as compared to the Nifty 50's 12-month run of 27 percent.
IndusInd Bank entered the MSCI Global Standard Index on November 30, 2023, along with Suzlon Energy, Persistent Systems, Paytm parent One97 Communications, APL Apollo, Polycab, Macrotech Developers, Tata Motors and Tata Communications.
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