FIIs may buy HDFC Bank shares worth $1 billion on June 1

HDFC Bank, a favourite stock of foreign investors, could see buying of more than $1 billion when the window for FIIs to trade opens up on June 1, said Macquarie in a note.Macquarie estimates headroom of about 1.4 per cent in the bank which will open up for buying.The scrapping of the separate window that allowed FIIs to trade among themselves in shares of companies that have touched the foreign holding limit could increase the quantum of buying in shares of the private bank on June 1, triggering a sharp upmove in the local shares.The buying of more than $1 billion could lead to the local shares rising sharply, said Macquarie.“Billion dollars is a big quantum. The stock could easily open up 4-5 per cent on that day,” said Suresh Ganapathy, head of financial research at Macquarie.The overseas investment limit is usually full in HDFC Bank due to the popularity of the stock but with the bank recently allotting fresh shares under employee stock options, resulting in dilution of equity, there is an opportunity for fresh purchases by overseas investors.ET had reported earlier this month that this window for foreign investors in HDFC Bank was scheduled to open on May 18 but Securities and Exchange Board of India postponed this to June 01. The regulator, in a circular dated May 17, said the new system for monitoring foreign investment limits in listed Indian companies shall be made operational on June 1.In February 2017, the Reserve Bank of India had lifted curbs on fresh buying by FIIs in HDFC Bank as their total stake fell below the limit of 74 per cent. The frenzied buying saw the limit being breached intraday, but many trades had already taken place by the time RBI stopped foreign purchases mid-session. FIIs, which bought the shares after breaching of the limit, had to sell their shares in the ensuing days. This time, depositories will allot shares to foreign investors on a pro-rata basis, ET reported. 64370922 64367697

from The Economic Times https://ift.tt/2J0dM5a