HDFC Bank, Lupin up on hopes to rake in more foreign moolah

Shares of both  HDFC Bank  and  Lupin  jumped 2 percent intraday Thursday on hopes of raking in more foreign moolah. The private bank has got Cabinet Committee on Economic Affairs’ (CCEA) nod to raise up to Rs 10000 crore via foreign investment and is allowed to limit foreign holding in the company upto 74 percent of the total paid-up capital. Brokerages are bullish on the private bank calling it a positive move. Jefferies maintains a buy rating on the stock with an increased rating of Rs 1255 per share. "With foreign limit at 74 percent  and foreign ownership at 73.4 percent, technically, the issuance can be slightly ahead of the 74:26 split. Management, however confirmed that they won't use this capital issue to issue more rupee shares to create foreign headroom. We concur, as the size of issue is unlikely to move the ownership needle much, even as greater FII ownership implies better price realisation (ADRs and FII board trades at a decent premium over local shares),” it says in a note. Nomura also reiterates a buy rating with hopes that Rs 10000 crore dilution will be 12 percent book value-accretive. "While at current Tier-1 levels of 11.8 percent (Q2FY15) there is no pressing need for a dilution, some pick-up in retail loan growth and higher threshold levels of equity capital under Basel III possibly explain a potential dilution," it explains. Meanwhile, Lupin touched record high at Rs 1539 per share as the CCEA has allowed itto increase in FIIs investment limit to 49 percent from 33 percent, which would result in foreign investment of around Rs 6099 crore in the country. At 10:39 hrs HDFC Bank was quoting at Rs 1,074.75, up Rs 16.65, or 1.57 percent and Lupin was quoting at Rs 1,537.30, up Rs 23.95, or 1.58 percent on the BSE.