HDFC Bank pips Reliance Industries Ltd to top 2

Mumbai: The shares of HDFC Bank on Monday trounced Reliance Industries Ltd (RIL) to become the second most valued company on the domestic bourses amidst a sharp surge in its prices after the Reserve Bank removed the restrictions placed on purchase of shares by foreign portfolio investors.

The stock vaulted 9.24 per cent in the intra-day trade soon after the opening bell and gave up most of its gains on profit taking. The stock finally ended the day at Rs 1,377.15, up Rs 49.80 or 3.75 per cent with a total market capitalisation of Rs 3.52 lakh crore knocking down RIL to the third spot with a m-cap of Rs 3.48 lakh crore.

Tata Consultancy Services, India’s largest software service provider tops the chart with a market value of Rs 4.74 lakh crore.

“RBI allowed fresh buying by foreign investors in HDFC Bank as their investment has fallen below the maximum limit prescribed by RBI. HDFC Bank has always attracted premium valuations in the industry and has been a preferred pick by foreign investors and accordingly we saw strong buying on Friday in the counter. However, going ahead, we believe the stock performance will depend on the core business growth, which we hope would pick up from FY18,” said Siddharth Purohit senior equity research analyst, banking, Angel Broking.

According to the shareholding pattern as on December 31, 2016, 878 foreign portfolio investors hold a total of 39.20 per cent stake in HDFC Bank while the Government of Singapore and Europacific Growth Fund hold 1.37 per cent and 4.76 per cent stake respectively.

The sharp rally in the shares of the private sector lender also helped the broader 50-share NSE Nifty to close above its key psychological resistance level of 8,820 on Friday.

The Nifty, which was finding it difficult to cross the 8,820 level mark for the past few days closed at 8,821.70, gaining 43.70 points or 0.50 per cent while the Sensex closed the session at 28,468.75, up 167.48 points or 0.59 per cent.