ICICI Bank Jumps As MSCI Rejig Seen Triggering $1-Billion Inflow

Shares of ICICI Bank Ltd. are set to touch their all-time high as analysts expect nearly a $1-billion inflow into the private lender on account of a likely increase in its weight on the MSCI Index.

Motilal Oswal expects ICICI Bank’s weight in the world’s largest index compiler to increase to 6 percent from 3 percent, attracting an overseas inflow of $1.2 billion.

Foreign institutional investment holding in ICICI Bank fell 2.6 percent sequentially, according to an exchange filing.

Lower FII holding, Motilal Oswal said in a note, would change the MSCI “investibility multiplier” in the index from 0.5 to 1, increasing the bank’s weight.

Morgan Stanley, too, expects ICICI Bank’s weight to increase to 5.7 percent because of an upward movement of the adjustment factor as foreign room on the stock goes above 25 percent. That, according to the research firm, may translate into foreign inflows worth $907 million into the private lender.

Shares of ICICI Bank rose as much as 4.2 percent during the day to Rs 456.25 apiece. That compares with a 1.8 percent gain in the NSE Nifty Private Bank Index. The stock hovers near its record high of Rs 458.65 apiece hit last month.