FTSE lowers ITC weightage, stock drops

Global index provider FTSE has lowered the weightage of Indian conglomerate ITC in its global equity index series from 75 per cent to 24 per cent and raised it in the case of two other Indian entities.

According to the FTSE Global Equity Index Series’ December Investability Weight Changes Summary, the weightage of three Indian companies — ITC, Kotak Mahindra Bank and Indusind Bank — has been changed.

While ITC’s weightage has been lowered, the other two companies' weightages have been increased.

In a note, Citigroup said the change in free-float weighting could lead to sale of 36 million shares worth about Rs 1,100 crore in ITC.

Kotak Mahindra Bank’s weightage has been increased from 33 per cent to 35 per cent and Indusind Bank's weightage was increased to 49 per cent from 24 per cent.

Following the announcement, shares of ITC tanked as much as 4.36 per cent to an early low of Rs 292.50 on the BSE. Shares of the company ended 3.55 per cent lower at Rs 295.

On the other hand, shares of Kotak Mahindra Bank surged 0.78 per cent to a high of Rs 665 while IndusInd Bank's shares jumped nearly three per cent to an early high of Rs 417.75 on the BSE. The Kotak Mahindra scrip closed at Rs 652.5, down 1.11 per cent, while shares of IndusInd Bank ended at Rs 408.65, up 0.90 per cent.

Other companies, whose weightages have been changed include Eurobank Ergasias of Greece (up from 75 per cent to 100 per cent), CJ Korea Express of Korea (down from 50 per cent to 40 per cent); Africa Israel Investments of Israel (up from 30 per cent to 50 per cent); Malaysia Airports of Malaysia (up from 30 per cent to 50 per cent) and Heckmann of USA (down from 100 per cent to 75 per cent).

The changes announced by FTSE would be effective from the close of trade on December 21.