IndusInd Bank shares: MSCI weight may double in Feb review, $290 million inflows likely

IndusInd Bank's September shareholding pattern suggests FPI holding in the private lender has come down, which if falls further in the December quarter could lead to doubling of the stock's weightage in the MSCI Standard index in the February review. This could potentially lead to $290 million inflows on the counter, Nuvama Institutional Equities said.

FPI holding in IndusInd Bank has dropped to 55.53 per cent in the September quarter from 59.62 per cent in the June quarter, showing a substantial reduction of 409 basis points.

Nuvama Institutional Equities expects the stock's MSCI weight to go up close to 58 basis points from the prevailing probable weight of 30 bps.

It said the foreign headroom is now just below the critical 25 per cent threshold, with MSCI currently applying a half-float factor.

"After the recent FII sell-off, the foreign room now stands at 24.96 per cent. If FII holding decreases by just 0.03 bps, the foreign headroom will exceed 25 per cent, potentially leading to a doubling of the bank's weight in MSCI during the February 2025 review," it said.

This weight increase could result in inflows of approximately $290 million, translating to about 17 million shares, which would likely have an impact over 5 trading days, according to Nuvama Alternative Research.

The stock is trading at multi year lows, it added.

For the September quarter, YES Secuities expects IndusInd Bank to report 7 per cent YoY rise in net profit at Rs 2,334 crore on 10.5 per cent YoY rise in NII at Rs 5,610 crore.

"Sequential loan growth will be in the 4.5 per cent ballpark due to idiosyncratic growth trajectory. NII growth will be  slightly slower than average loan growth due to rise in cost of deposits outpacing yield on advances.  Consequently, NIM will be slightly lower sequentially. Sequential fee income growth will broadly match loan  growth. Opex growth would slightly lag business growth. Slippages would be broadly stable on sequential  basis. Provisions will be lower on sequential basis," it said.