Shares of Kotak Mahindra Bank Ltd. advanced on Tuesday in early trade as its foreign portfolio investor shareholding declined during the three-month period ended March 2023, as a result analysts expect MSCI to increase the bank's weightage.
"The stock has been languishing for quite some time and the MSCI weightage up trigger could lead to strong momentum," said Nuvama Institutional Equites.
The FPI shareholding in the company fell from 42.7% to 41.22% sequentially in the fourth quarter of the fiscal 2022-23. The drop in the shareholding expanded Kotak Mahindra Bank Ltd.'s foreign room to 25%.
Consequently, as per the analysts tracking the banking sector, the rise in the bank's foreign room may lead to change in the adjustment factor of 0.5 to 1.
As per Nuvama Institutional Equites, since the shareholding of the bank was released before the MSCI price cutoff announcement in May 2023 review, the weightage of the private lender could be increased in the upcoming review itself.
"If our shareholding calculations hold true and MSCI considers 41.22% as current foreign holding then Kotak Mahindra Bank Ltd. could see weight up led inflow to the tune of $690 million which is almost 3.20 crore shares buying," said Nuvama Institutional Equites.
Total traded volume stood at 6.4 times its 30-day average. The relative strength index was at 73.2, implying that the stock maybe overbought.
