Canara Bank may join Team Nifty Bank, inflows of $73 million expected
Bandhan Bank, PSU stock Canara Bank is likely to make it to Nifty Bank, which may lead to inflows worth $73 million from passive funds. The semi-annual index rejig will come into effect from March 31 but an announcement on this is expected from Nifty Indices in the second half of February.
JM Financial's Neeraj Agarwal expects Canara Bank to see inflows worth $73 million while Bandhan Bank may see an outflow of $56 million as a result of the reshuffle.
Shares of Canara Bank, which gained 23% in the last two weeks, will remain in focus this month as the board of directors of the state-owned lender will meet on February 26 to consider a stock split.
«It is important to note that Canara Bank must maintain a position above Rs 440 or outperform Bandhan Bank or else it will miss the chance,» said Nuvama's Abhilash Pagaria.
Canara Bank shares ended Friday's session flat at Rs 570.70 on the BSE.
The state-owned bank posted a 29% increase in its profit at Rs 3,656 crore in the third quarter ended December 2023 while net NPAs came down to 1.32% from 1.96% at the end of the third quarter of the previous fiscal.
The banking index is heavily dominated by HDFC Bank and ICICI Bank, which together comprise about 51% of the weightage. SBI, Axis Bank and Kotak Mahindra Bank have about 10% weightage each. Others in the 10-pack index include IndusInd Bank, Bank of Baroda, Punjab National Bank, Federal Bank and IDFC First Bank.
Nifty Rejig
Brokerages also expect a change in the composition of the popular 50-pack Nifty index.
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