SBI could receive $466 million in passive inflows if FII limit is raised
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State Bank of India could draw as much as $466 million in passive inflows if the cap on foreign institutional investment in public-sector banks is raised, Nuvama Institutional Equities said. The brokerage said a possible move to lift the ceiling on foreign holdings from 20% to 26% would create meaningful room for additional MSCI index weightings. “From a passive flows perspective, the big impact would come via MSCI indices if the change goes through,” said Abhilash Pagaria, head of Nuvama Alternative & Quantitative Research. The Economic Times had reported earlier this week that the government is weighing a proposal to raise the foreign investment limit in public-sector banks as part of broader reforms to boost capital and strengthen balance sheets. Currently, foreign direct investment in PSBs is capped at 20%, compared with 74% for private banks. Officials have indicated that while foreign ownership could rise, the government will re...