22 May , 2021 By : Kanchan Joshi
MUMBAI: FTSE has included newly listed stocks Gland Pharma and Indian Railway Finance Corporation (IRFC) in its All World index as part of its quarterly rebalancing review released on Saturday. FTSE will also implement the fourth and final tranche of India Foreign Ownership Limit (FOL) changes. All changes will be effective 21 June.
In the quarterly reviews, FTSE only considers initial public offerings (IPOs) or demergers which meets their internal criteria.
Inclusion of Gland Pharma and IRFC in All World index is likely to bring an estimated inflow of $68 million and $20 million respectively, according to Abhilash Pagaria, analyst, Edelweiss Alternative Research.
Gland Pharma Ltd, the first Indian company with a Chinese promoter to go public, made its stock markets debut in November. The company’s Rs6,480 crore IPO, the biggest in India’s pharmaceutical sector, was open for subscription from 9 to 11 November at a price band of Rs1,490-1,500. The issue was subscribed 2.06 times.
Proceeds from the issue was expected to be used to fund incremental working capital and capital expenditure requirements as well as for general corporate purposes. Hyderabad-based Gland Pharma is one of the fastest-growing generic injectables focused companies, operating in more than 60 countries.
State-owned IRFC was listed in January this year. The government sold around 13.64% in the company to raise around Rs4,633.38 crore in then share sale. IRFC is a dedicated market borrowing arm of the Indian Railways and is wholly-owned by the government acting through the Ministry of Railways. Its primary business is financing the acquisition of rolling stock assets and project assets of the Indian Railways and lending to other entities under the ministry.
Pagaria also expects India to see net inflows of around $800 million in existing names as FTSE will also implement the final tranche of India FOL changes.
Earlier last year, the finance ministry had increased aggregate foreign portfolio investors (FPI) limit for Indian companies in equivalent to the sectoral limit. A company, could, however, choose to decrease its respective FPI limit to a lower threshold with the approval of its board of directors and its general body before 31 March, 2020.
Due to market conditions and based on feedback from index users, FTSE Russell had thought it prudent to delay the commencement of the India FOL implementation until September 2020. The implementation is being tranched over four index review periods to avoid market disruption and spread outflows from other markets being sold down.
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