Bank Nifty index rejig: HDFC Bank, IndusInd Bank to see fund inflows; SBI, ICICI Bank to record outflows

HDFC Bank, IndusInd Bank, AU Small Finance Bank, and Bandhan Bank will witness the highest fund inflows today among the Bank Nifty stocks, as the index is rebalanced. The banking index will see a change in its weights as a part of the semi-annual index review. There will be no fresh inclusions to the index as no other stock from the banking space qualifies to replace any of the existing constituents. Fund outflows will be seen in stocks such as State Bank of India, ICICI Bank, and Kotak Mahindra Bank, according to Edelweiss Alternative Research.

“As per our best understanding and calculations, we have done the analysis of rebalancing led flow in Nifty Bank whereas hardly any passive money tracks Private Bank Index,” Edelweiss Alternative Research said in a note. HDFC Bank’s weightage is expected to increase to 28.94% from the current 27.80%, which would result in $51.1 million in fund inflows. On the other hand, the largest public lender, State Bank of India;s weightage will fall to 11.16% from 12.24%, translating to $48.6 million in outflows. ICICI Bank is expected to see its weight trimmed to 21.84% from the current 22.78% and hence see outflows worth $38 million. 

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The report said that the realignment of weight in constituents of Nifty Bank and Nifty Private Bank will be mainly led by the fresh issue of capital in Federal Bank. Nifty indices are taken up for semi-annual review based on the average market capitalization in six months ending July 30. The announcement for the same was made in August. 

Fund inflows

-HDFC Bank – $51.1 million
-IndusInd Bank – $24.9 million
-AU Small Finance Bank – $11.2 million
-Bandhan Bank – $8.5 million
-Federal Bank – $7.1 million
-IDFC First Bank – $5.2 million
-PNB – $4.8 million
-RBL – $3.4 million

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Fund outflows

-State Bank of India – $48.6 million
-ICICI Bank – $38 million
-Kotak Mahindra Bank – $20.1 million
-Axis Bank – $9.8 million