FIIs owning less than 55% of HDFC Bank could lead to a weight increase in the MSCI index, potentially boosting passive fund inflows.
Estimates suggest that the weight change could trigger inflows of $3.2 billion to $4 billion, enhancing the stock's performance.
The MSCI Emerging Markets Index rebalancing in August, with an official announcement on August 13, is expected to include HDFC Bank's weight increase.
HDFC Bank's US-listed ADRs also rose over 4%, indicating positive sentiment. The stock has rallied nearly 20% in three months.