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On Tuesday, shares of Kotak Mahindra Bank surged nearly 6% after the reduction of FII stake in the private lender increased expectations of $690 million inflows.
At 10 a.m. on the NSE, Kotak Bank shares were trading at Rs 1,833.45 per share.
In the March quarter, FIIs reduced their stake in Kotak Bank by 1.47 percentage points to 41.22 percent, according to the most recent shareholding data. As a result, foreign headroom could increase to 25.05 percent from the current 22.3 percent.
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The foreign headroom is just above the required threshold of 25% and could now result in a change of adjustment factor to 1 from 0.50, Nuwama said, adding that if its shareholding calculations hold true and MSCI considers 41.22 percent as current foreign holding, then Kotak Mahindra Bank (KMB) could see weight-up led inflow of $690 million, which is nearly 32 million shares buying (7-day average traded volume).
The company disclosed its shareholding data prior to the MSCI price termination date for the May 23 review.
The stock has languished for a considerable amount of time, and the MSCI weight-up catalyst could contribute to strong momentum, according to Nuwama, which added that it was “continuously monitoring this event.”
Today, Kotak Bank shares led the cluster of Nifty50 gainers.
Over 36.8 million shares of Kotak Bank were traded at this time, constituting a significant volume. In November 2022, the stock reached its 52-week high of Rs 1,997.55, which has since been surpassed. According to Trendlyne data, it has marginally outperformed the Nifty50 index, with returns of over 2% over the past year compared to 0.3% for Nifty50.