Mumbai: Shares of HDFC Bank Ltd jumped to a record high on Thursday, after Macquarie Capital Securities (India) Pvt. Ltd said that foreign institutional investors (FIIs) are likely to buy more than $ 1 billion of the stock on Friday when a trading window for them opens for a day.

On Thursday, HDFC Bank shares surged as much as 5.03% to a record high of Rs2,150 in intraday trade on the BSE. The stock closed at Rs2136.15, up .36% from its previous close, while the Sensex ended 1.19% up at 35,322.38 points.

Markets regulator Securities and Exchange Board of India (Sebi) has asked stock exchanges to close the trading window—popularly known as the “6 lakh series" which allowed FIIs to trade among themselves in stocks where the foreigners’ quota has been exhausted—effective 1 July.

When stocks get into FII restriction, there is a separate window on which only FIIs trade so that they still have the option of buying the stock. Since the buyer will be purchasing from another FII, it ensures that there is no change in FII shareholding. For stocks in demand this usually leads to an FII premium, Macquarie analysts said in the note.

When the stock will be open for FII trading on 1 June—the headroom will be 143 basis points. One basis point is one-hundredth of a percentage point.

“Now that this will be the last opportunity for FIIs to buy HDFCB (HDFC Bank), we think that the scrapping of FII window will increase the quantum of buying that will come in on 1st June. The buying could be more than $1bn on June 1," HDFC Bank analysts Suresh Ganapathy, Nishant Shah and Akash Nainani said in a note on 29 May.

HDFC Bank ADRs (American Depository Receipts) spiked up 8.62% to $105.17 in Wednesday’s trade.

The analysts pointed that HDFC Bank usually has the highest FII premium—it used to be higher than 20% before it came crashing down in Feb 2017 when the stock opened up for FIIs for a day, and premium is now running at around 3.5%.

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