Daily Brief India: HDFC Bank, Adani Enterprises, Wipro Ltd and more

In today’s briefing:

HDFC/HDFC Bank Mega Merger: Foreign Holdings Move Lower; Foreign Room Higher
Adani Enterprises Offering – A Discount and a Put Option But Liquidity Is a Bug Not A Feature
S&P BSE/Sensex Quiddity Leaderboard Jun 23: Adani Enterprises, Wipro, & The Usual F&O Questions

HDFC/HDFC Bank Mega Merger: Foreign Holdings Move Lower; Foreign Room Higher

Foreign shareholding in HDFC Limited (HDFC IN) and HDFC Bank (HDFCB IN) has dropped over the December quarter resulting in higher foreign room.
The merger is expected to complete in Q2/Q3 when we expect there will be large buying from MSCI trackers.
The merger (and the timing of implementation) will have implications for changes to the NIFTY Index (NIFTY INDEX) and S&P BSE SENSEX Index (SENSEX INDEX) at the forthcoming rebalances.

After the postal ballot approved the offering in December 2022, Adani Enterprises (ADE IN) is on track to conduct a Rs 200bn or US$2.4bn+ Equity Offering.
One exchange release today gave the timing, and following few articles in recent days suggesting it, another release said the offering would be partly paid shares.
The structure of the Offer and risks are detailed below but investors should remember, it was illiquidity which got the price here. Liquidity is a Bug not a Feature.

In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, 200, and 500 Indices in the June 2023 Rebalance.
Adani Enterprises (ADE IN) could be added and Wipro Ltd (WPRO IN) could be deleted from the SENSEX Index. There could be multiple changes for BSE 100, 200, and 500.
Below is a look at our estimated rankings for potential ADDs/DELs, their recent price performance vs peers, and potential trading opportunities.

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