Merged HDFC Bank may not make it to MSCI, FTSE indices, say analysts

There is a risk index trackers may have to sell HDFC, which is part of global indices currently

Inclusion in global indices such as MSCI and FTSE will continue to remain a pipe dream for HDFC Bank even after the merger with parent Housing Development Finance Corp (HDFC).

According to analysts, the investment legroom for foreign investment in the merged entity will be around 10 per cent—less than the required threshold of 15 per cent and 20 per cent set by MSCI and FTSE, respectively.

As a result, the country’s third-most valuable company will remain out of widely-tracked MSCI and FTSE global indices that help channelise billions of dollars of foreign investments.

Currently, HDFC Bank, with a market