HDFC may exit Nifty 50 by January, before its shares are expected to sell for $ 1.5 billion – hdfc bank shares may see an outflow of 1.5 billion dollars before hdfc exit from nifty fifty by january

HDFC Bank and HDFC are going to merge. Meanwhile, investors’ eyes are on HDFC. They are betting on it. Actually, this company is going to be out of Nifty 50 index. However, the merger plan has gone ahead after HDFC Bank’s September quarter results. Earlier this merger was to take place in the second quarter of this financial year. Now this will happen in the first quarter of the next financial year.

Generally, in cases of merger or demerger, the decision to remove the company from the indices of NSE and BSE is taken after the meeting of the shareholders. In the case of HDFC, the shareholders’ meeting is scheduled to be held on November 25 to approve the proposal for its merger with HDFC Bank.

Abhilash Pagadia of Nuvama Wealth Management said, “HDFC may exit all Nifty indices by the end of December 2022 or mid-January 2023.” He said considering HDFC’s weighting of 5.5 per cent in Nafty 50, there could be heavy selling by passive funds. Currently, more than 22 ETFs track the Nifty 50 index as their benchmark. Their total assets under management is more than Rs 2 lakh crore.

According to Nuvama, there can be more than $ 1.5 billion sell-off in HDFC shares. This will happen due to the exclusion of HDFC shares from the Nifty indices. This can also have an impact on the shares of HDFC Bank. HDFC shareholders will get 42 shares of HDFC Bank for every 25 shares. Looking at the swap ratio, HDFC shares may see a major fall before exiting Nifty. This may also add to selling pressure on HDFC Bank shares.

Dealers say that after NSE announces the exclusion of HDFC from its indices, traders will start making short positions in its shares. Pagadia allayed fears of exclusion of HDFC Bank from the NSE indices after the merger. This was feared by some market participants.

Till now NSE has never excluded a company from its indices in which another company is merged. Shriram Transport Finance and Tata Steel are examples. Pagadia said that after the merger, HDFC’s weightage in the Nifty 50 will increase when the shares of the new company start trading with higher market float.

Pagadi believes that Ambuja Cements, Tata Power and Pidilite Industries may join the race to replace HDFC if it exits Nifty 50.

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