IndusInd Bank Poised for MSCI Weight Increase, Potentially Attracting $290 Million in Inflows Amid FPI Sell-Off

IndusInd Bank seems to be attracting attention due to potential changes in its MSCI weight and foreign institutional investor (FII) dynamics. Here’s a summary of the key points from the report:

  1. MSCI Weight Increase: Nuvama Institutional Equities expects IndusInd Bank’s MSCI weight to increase by about 58 basis points, which could lead to significant inflows estimated at around $290 million if FII holding drops further.
  2. Current Shareholding Pattern: FPI holding in IndusInd Bank decreased to 55.53% in the September quarter from 59.62% in June, indicating a substantial sell-off.
  3. Foreign Headroom: The foreign ownership threshold is currently just below 25%, and a slight drop in FII holding could push it over this threshold, potentially doubling the bank’s weight in the MSCI Standard index during the February 2025 review.
  4. Impact on Stock: The anticipated inflows could result in around 17 million shares being purchased over five trading days, particularly given that the stock is trading at multi-year lows.
  5. Financial Projections: YES Securities projects a 7% year-on-year rise in net profit for IndusInd Bank in the September quarter, with a net interest income (NII) increase of 10.5%. Sequential loan growth is expected to be around 4.5%, but net interest margins (NIM) may be slightly lower due to rising deposit costs.

This information could be crucial for investors looking at IndusInd Bank, especially in light of the potential MSCI adjustments and market dynamics. Would you like to dive deeper into any specific aspect?

Disclaimer: This communication is for informational purposes only and should not be construed as investment advice. The insights and projections regarding IndusInd Bank’s MSCI weight increase and potential inflows are based on the analysis of Nuvama Institutional Equities and YES Securities and are subject to change. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results. The risks associated with investing in stocks can be substantial, and individual circumstances may vary.


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