Thread by @rajivmehta19

#HDFC- HDFC Bank surprising interim shareholding disclosure-

The foreign shareholder disclosure by the two giants (HDFC Ltd and #HDFCBank)today is one of the rare events,as generally the shareholdings for a quarter is disclosed only in the beginning of next quarter

HDFC - bseindia.com/xml-data/corpf…

HDFCB - bseindia.com/xml-data/corpf…

🔹Since the announcement of merger on April 04, 2022 HDFCB has corrected by 20% and HDFC by 18% vs Nifty Index which has declined by 10% till date.

The surprising foreign shareholding disclosure today reflects more of a pro-active measure by the management to help calm jittery nerves of the investor community

What has changed since March 31, 2022 shareholding toMay13,2022 Foreigners have trimmed stake in both the entities

🔹HDFCB IN - As on March 31, the Foreign holding was 68.5% and now it stands at 66.5%. Down by 2%.

🔹HDFC IN- As on March 31, the Foreign holding was 69.19% and now it stands at 68.5%. Down by 63bps.

🔹Thus as of May 13, as per _Edelweiss Alternative Research_ calculations, the combined foreign shareholding of the to be merged entity is 62.1% and this results in the foreign headroom of 16%.

🔹The minimum foreign headroom requirement for widely followed Global Index is 15%

and so as per the latest disclosure, the merged entity will not face the fear of deletion. However, it is only reasonable to consider the final outcome post the Record Date of merger which is at least 15 to 18 months from now.

So to continue this shareholding, foreigners will have to remain on side lines till the Record Date of merger; otherwise as per the existing methodology, the merged entity holds a probability of missing the chance to remain in Global Index .