FTSE, the British provider of stock market indices and one of the most widely used, has tweaked its ‘investability weight’ in stocks on its global equity index series.
The said ‘weight’ includes HDFC, IDFC, Apollo Tyres, Indiabulls Real Estate and Mahindra and Mahindra Financial Services. It has increased the weight in HDFC, Apollo Tyres, Indiabulls and M&M Financial, while cutting its weight in IDFC. The changes will be effective September 23, said FTSE in its website.
Analysts said the increases in ‘investability weight’ would result in fresh flow of foreign institutional money into these stocks, as these investors benchmark their funds to these indices. For HDFC, the weight has been increased to 100 per cent from 74 per cent. Analysts expect Rs 2,000 crore of fresh foreign money to flow into HDFC shares on account of the change.
FTSE has raised the weight in Apollo Tyres to 40 per cent from 30 per cent, in Indiabulls Real Estate to 54 per cent from 24 per cent, and in M&M to 43 per cent from 35 per cent. In IDFC, the weight has been cut to 54 per cent from 74 per cent.
Most of these shares traded higher or had rebounded from lows after the announcement but erased the gains or slipped into losses after the broader markets fell. Indiabulls shares fell 3.4 per cent to close at Rs 60.15 after touching Rs 66 earlier in the day; M&M Financial shares declined 0.7 per cent to Rs 267.70. Shares of HDFC rose 0.4 per cent to close at Rs 815.70, off the early low of Rs 794. Apollo shares ended at Rs 64.05, unchanged from the previous day.
IDFC shares rose 2.8 per cent to close at Rs 94.85, off the day’s high of Rs 99.75, also after the Reserve Bank of India’s move to lift restrictions on purchase of its shares by foreign investors. The restrictions were lifted after the shareholding of foreign institutional investors (FIIs) and other categories of foreign investors fell below the prescribed threshold limit as specified in the foreign direct investment policy. The FII holding in the company stood at 52.19 per cent at the end of the June quarter, down from 53.23 per cent in the previous one.
