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    Vikshita Vitthal Gujaran in News

    05-May-2023 12:21 PM


    Merged HDFC entity could see $200 million outflow after MSCI tweak

    Contrary to Street's expectation of HDFC's merged entity commanding double the current weight in MSCI, the index provider tweaked the adjustment factor on May 5, indicating the weight will remain more or less the same.

    "Previously, the adjustment factor for computing the weight of merged entity was 1x. Now, MSCI says it will be 0.5x. So, it was earlier expected that the merged entity would see $3 billion inflow. Now, MSCI's tweak could result in $150-200 million outflow," Abhilash Pagaria of Edelweiss Alternative Research told Moneycontrol.

    At present, HDFC's weight is 6.74 percent in MSCI India Index and as per Pagaria's preliminary calculations, the merged entity will end up having a slightly lower weight of about 6.5 percent.

    Both HDFC and HDFC Bank shares opened over 4 percent lower on May 5 after the MSCI tweak. At 9.20 am, HDFC was quoting at Rs 2,745 on the NSE, down 4.09 percent from the previous close and HDFC Bank shares were down 4.07 percent at Rs 1,657.50.