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Mumbai: HDFC Bank may have missed out on the prospect of fresh foreign purchases of its stock by a whisker.Overseas investors' stake in the bank fell in the March quarter but this fell short of index provider MSCI's requirements to increase the stock's weight on the index.With the reduction in FPIs' stake, foreign investor headroom in the bank has risen to 24.95%, slightly lower than the MSCI requirements of 25%.The foreign holding in HDFC Bank now stands at 55.54%, said Abhilash Pagaria, head of Nuvama Alternative Research.An increase in a stock's weight on MSCI indices would result in global exchange-traded funds (ETFs), whose portfolios mimic these indices, making fresh purchases.Following the merger of HDFC Bank with parent HDFC, the combined entity's total weight in the MSCI index should have been higher, considering the total free float capitalisation.109049362However, MSCI opted to maintain an adjustment factor of 0.5 instead of 1. This implies that foreign investors should have headroom to buy at least a 25% stake in the bank. This can happen only when existing foreign investors further sell their stake in the lender."With the potential for further selling in this quarter, there may be a possibility of a weight-up adjustment in the August review," said Pagaria.The stock, which declined nearly 9% in the last three months, gained over 3% to close at ₹1,527.90 after better-than-expected deposit growth in the March quarter."The stock is trading near its multi-year lows, and don't expect sharp correction as very little is built in from a weight-up perspective and declines should be used as an opportunity to go long," Pagaria added.In the March quarter of the previous year, the foreign holding of Kotak Mahindra Bank experienced a decline of 1.47%, leading to an increase in foreign headroom from 22.38% to 25.05%. Subsequently, MSCI adjusted its factor from 0.5 to 1, resulting in an inflow of over $700 million. After declining 2% in the year until April 2023, the stock witnessed a robust rally of over 12% within a month following the adjustment factor change.

Mumbai: An entity promoted by the Shapoorji Pallonji Group raised ₹505 crore from Asia Pragati Strategic Investment Fund to complete its existing projects and repay debt raised from other lenders, said people with knowledge of the matter.Ricardo Constructions, a wholly-owned company of the SP Group engaged in the construction of residential apartments, raised the bonds from Asia Pragati Strategic Investment Fund, managed by PAG, a global alternative investment firm.PAG declined to comment. Shapoorji Pallonji and Co did not respond to ET's request for comment.Asia Pragati invested in senior secured, unrated, unlisted bonds having five-year tenure maturing on March 31, 2029. The construction company offered 17.25% as payment in kind (PIK), which includes a 12% coupon payment. The difference between the coupon payment and PIK could be in the form of fees or shares, one of the persons cited above said.Ricardo Constructions raised funds to repay ₹405 crore debt taken from a Piramal group company and HDFC Bank, according to disclosures made by the company to the NSDL.The remaining funds will be used to complete the construction of a residential project in Mulund, a suburb of Mumbai. According to a media report published in May 2023, Nirmal Lifestyle, in association with the United States Tennis Association (USTA), launched the Mulund luxury residential project in 2009, but it failed to take off. Subsequently, Nirmal Lifestyle sold the rights to the project to Ricardo Constructions. The report stated that in February 2023, the MahaRERA extended the deadline to complete the project to March 2026.SD Corporation, a Shapoorji group company, has given an unconditional guarantee to the extent of ₹600 crore, while Honcho Properties has given an unconditional guarantee of up to ₹330 crore.

Mumbai: The Reserve Bank of India on Thursday provided an additional month to comply with directions on exchange traded currency derivatives while aiming to quell speculation about the status of mandatory underlying contracts. This comes after recent market turbulence sparked by uncertainty over the need to prove that trades were being done for hedging purposes.In view of feedback received and recent developments, it had been decided that the latest directions on exchange traded currency derivatives (ETCD) would be applicable from May 3, 2024 instead of April 5 as was said in a January 2024 circular, the RBI said."In the recent period, some concerns have been expressed about participation in the exchange traded currency derivatives (ETCD) market in light of the Reserve Bank of India's A.P. (DIR Series) Circular No. 13 dated January 05, 2024," the central bank said on Thursday.The central bank said that while hedging trades could be done up to $100 million without producing underlying contracts, they would have to be backed by them. The RBI's statement came after a recent scramble from retail players to unwind positions due to uncertainty over the need to prove valid underlying contracted exposure ahead of the earlier deadline of April 5.The recent volatility had been sparked by the inclusion of a note to the RBI's directions in its January 2024 circular. The note said that recognised stock exchanges shall inform users that while they are not required to establish the existence of underlying exposure, they must ensure the existence of a valid underlying contracted exposure."As hitherto, participants with a valid underlying contracted exposure can continue to enter into ETCDs involving the INR up to a limit of $100 million without having to produce documentary evidence of the underlying exposure," the RBI said on Thursday.The RBI emphasised that the regulatory framework for ETCDs had remained consistent over the years and that there was no change in the central bank’s policy approach.The central bank referred to a circular dated June 20, 2014, pointing out that while the central bank had permitted users of ETCDs to take positions up to a limit without providing documentary evidence, it had not provided “any exemption from the requirement of having the exposure.”“Accordingly, users are expected to ensure compliance with the requirement of having underlying exposure. The limit of $10 million per exchange was subsequently amended and currently stands at a single limit of $100 million combined across all exchanges,” the RBI said on Thursday.While larger players like foreign portfolio investors are largely unaffected by the developments, retail players, proprietary traders and brokerages have been rapidly squaring off positions due to inability to comply with the provision for ensuring existence of valid underlying contracted exposure. Retail players and proprietary traders make up the bulk of the volumes for exchange traded currency derivatives.