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Business News/ Markets / Stock Markets/  HDFC Bank ADR rises 7% after Q4 updates lifts sentiments despite reduction in FII shareholding
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HDFC Bank ADR rises 7% after Q4 updates lifts sentiments despite reduction in FII shareholding

HDFC Bank ADR on the NYSE was last up 6.21 per cent at $69.90, after India's biggest private lender's fourth quarter business updates lifted investor sentiments earlier today.

HDFC Bank shares rose more than three per cent after Q4 business updates (Bloomberg)Premium
HDFC Bank shares rose more than three per cent after Q4 business updates (Bloomberg)

HDFC Bank stock is likely to extend gains on Friday as its US-listed shares rose more than seven per cent on April 4. HDFC Bank American Depository Receipts (ADR) on the New York Stock Exchange (NYSE) was last up 6.21 per cent at $69.90, after India's biggest private lender's fourth quarter (Q4FY24) business updates lifted investor sentiments earlier today. 

However, this came despite shareholding data revealed that the ownership of foreign institutional investors (FII) in HDFC Bank declined during the the March 2024 quarter. The FII ownership in HDFC Bank dropped to 47.83 per cent in March 2024 quarter from 52.39 per cent in the December quarter.

An American Depositary Receipt or ADR is like a special certificate issued by a US bank, and it represents the shares of a foreign company. These ADRs can be traded on US stock markets, just like regular shares of US companies.

Also Read: ‘Billions of dollars': What Helios Capital's Samir Arora estimates after FIIs reduce shareholding in HDFC Bank

HDFC Bank Share Price Today

On Thursday, shares of HDFC Bank opened at 1505 and rose around two per cent to hit an intra day high of 1529.85 against a 52-week high of 1,757.80 apiece on the BSE. Shares settled 3.06 per cent higher at 1,527.90 apiece on the BSE. In the past six months, HDFC Bank shares have given 6.25 per cent returns to investors and 5.5 per cent in the last one week alone.

HDFC Bank Q4 Business Updates

HDFC Bank's loan book crossed 25 lakh crore in the fourth quarter ended March 2024. The bank’s gross advances aggregated to 25.08 lakh crore as of March 31, 2024, a growth of 55.4 per cent over 16.14 lakh crore as of March 31, 2023, said HDFC Bank in its regulatory filing to the stock exchanges.

The figures for the period ended March 31, 2024 include the operations of erstwhile HDFC Ltd, which amalgamated with HDFC Bank on July 1, 2023 and hence are not comparable with those of the corresponding period of the previous year, said HDFC Bank.

Also Read: HDFC Bank Q4 Result: Private lender to announce Q4 earnings, dividend on April 20

The bank's commercial and rural banking loans grew 24.6 per cent over March 31, 2023 and around 4.2 per cent over December 31, 2023. The corporate and other wholesale loans, excluding non-individual loans of the erstwhile HDFC Ltd, grew around 4.1 per cent over March 31, 2023.

The bank's deposits aggregated to 23.8 lakh crore as of March 31, 2024, a year-on-year growth of around 26.4 per cent over 18.83 lakh crore and of around 7.5 per cent over 22.10 lakh crore as of December 31, 2023.

FII/FPI shareholding in HDFC Bank

The reduction in FII shareholding is leading to expectations that there may be some balancing and fresh emerge from new foreign investors to compensate for the gap that has been created by reduced FII stakes in HDFC Bank and the requirement to meet the weightage in the index provider MSCI.

Also Read: HDFC Bank: FII ownership declines to 47.8% in the March' 2024 quarter from 52.3% at the end of December'2023 quarter

Also the shareholding of foreign portfolio investors (FPIs) in HDFC Bank rose to 24.95 per cent during the quarter ended March 2024. However, it fell short by only five bps of the threshold required for MSCI to hike its weightage in its global indices. The foreign holding now stands at 55.54 per cent compared to the requirement of 55.5 per cent.

Even as FII reduced stakes, the mutual funds have been raising stakes in HDFC Bank, suggested the data on the exchanges. The mutual fund holding more than one per cent stake in HDFC Bank have seen ownership increase to 22.35 per cent by end of March 2024 quarter compared to 19.48 per cent at the end of December'2023 quarter.

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ABOUT THE AUTHOR
Nikita Prasad
Nikita covers business news and has been producing news on digital platforms since 2018. She writes on economy, policy, markets, commodities, industry. Her core areas of interests include infrastructure, energy, oil and gas, railways, and transport/mobility. She has worked for business news channels like Moneycontrol, NDTV Profit, and Financial Express in the past. If you have story ideas/pitches/reports or quotes/views to share, reach her at nikita.prasad@htdigital.in.
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Published: 04 Apr 2024, 07:45 PM IST
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