HDFC Bank to command more weightage in Nifty than Reliance

With the reverse merger of HDFC twins making HDFC Bank stock much more powerful, India’s largest private sector lender will now command more weightage in Nifty than billionaire Mukesh Ambani’s Reliance Industries.

With effect from July 13, when HDFC shares stop trading on stock exchanges following a reverse merger with its banking unit, the weightage of HDFC Bank will increase to 14.43%. At present, RIL controls 10.9% of Nifty which will get reduced to 10.8%.

The changes will make HDFC Bank command the highest weightage in the index and give it more fire power to dictate the direction of India’s heartbeat index.

In case of Nifty Bank index, HDFC Bank’s weight will increase from 26.9% to 29.1%, leading to inflows of about $70 million from passive funds, according to calculations by Nuvama.

ICICI Bank will see its weight reducing from 24.4% to 23.3%. India’s two largest private sector lenders ICICI Bank and HDFC Bank will together command 52.4% of weightage in Nifty Bank.

SBI, Kotak Mahindra Bank and Axis Bank would also suffer weight reduction in the banking index.

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