MSCI said that post the merger of HDFC and HDFC Bank, it will include the merged entity in its large-cap index, however, instead of using the adjustment factor of 1, the adjustment factor would be 0.5.

This will result in an outflow of $150 to $200 million in the merged entity, said Nuvama Research in a note, reported Reuters.

The fall in share prices of Housing Development Finance Corporation and HDFC led to a decline in key indices, as in early deals, Sensex slipped almost 400 points, while, the Nifty50 fell nearly 1 per cent.

At the time of writing, HDFC was trading 5.11 per cent down at Rs 2,716, while, HDFC Bank was down 5.30 per cent, trading at Rs 1,635.30 on BSE. Meanwhile, Sensex was trading 381.48 points, or 0.62 per cent down, at 61,367.77. Meanwhile, the broader NSE Nifty50 was down 107.25 points, or 0.59 per cent at 18,148.55.

MSCI’s update came as HDFC on Thursday reported a 20 per cent year-on-year (YoY) rise in its net profit to Rs 4,425 crore. HDFC said its assets under management (AUM) grew by 10.71 per cent to Rs 7,23,988 crore in FY23.

On the other hand, HDFC Bank reported a 21 per cent YoY rise in its net profit in the fourth quarter to Rs 12,594.5 crore.