HDFC gains after MSCI reverses weight reduction decision

The stock of Housing Development Finance Corporation (HDFC) advanced 4.4 per cent to Rs 662.55 on Thursday after MSCI said it had reversed its decision to cut the weightage of the mortgage lender by half.

On May 15, MSCI, a provider of indices, had said it would reduce HDFC’s weightage in the MSCI Index from 6.2 per cent to 3.2 per cent. The move was triggered by a decrease in number of shares available to foreign institutional investors (FIIs).

The decision to reverse the weightage cut was taken after HDFC’s board passed a resolution to increase the limit on FII shareholding from 74 per cent to 100 per cent of the paid-up capital. MSCI said it would once again review HDFC’s weightage at its next quarterly review in August, as the Reserve Bank of India’s approval for the increase in FII ownership limits was still awaited.