HDFC Bank’s share price has plummeted around 4.40%, trading at Rs 746.10 on the Bombay Stock Exchange (BSE) as of 1:16 PM. This decline is part of a troubling trend, with the stock falling nearly 11% in just five sessions last week and over 19% in the past month.
In early trade, the stock hit a 52-week low of Rs 745.40, raising alarms among investors. The bank’s market capitalization has dropped by a staggering ₹1.34 lakh crore, reflecting growing concerns.
The turmoil follows the resignation of chairman Atanu Chakraborty, who cited differences related to personal values and ethics. In his place, Keki Mistry has been appointed as interim non-executive chairman for three months.
Adding to the bank’s woes, three senior employees were terminated over issues linked to the alleged mis-selling of Credit Suisse AT-1 bonds. Furthermore, the Dubai Financial Services Authority has barred HDFC Bank from onboarding new clients in Dubai.
The Reserve Bank of India has stated it does not see material concerns regarding the bank’s overall conduct or financial position, but investor confidence is shaken. The bank is currently trading at a price-to-earnings (PE) ratio of 16.48 and a price-to-book (P/B) ratio of 2.3.
Investor lawsuits are piling up due to these recent developments, with analysts noting that the decline is driven by a combination of governance concerns, leadership changes, and regulatory issues.
“Execution continues to be strong, though recent developments could delay any near-term re-rating of the stock,” said Axis Securities.
In response to the crisis, Sashidhar Jagdishan emphasized the bank’s commitment to transparency and resolving all issues, whether previously identified or newly emerging. The board plans to revisit past actions and implement corrective measures where required.
As the situation unfolds, investors are left with uncertainties about the bank’s future performance and governance stability. Details remain unconfirmed.
