MUMBAI: The sudden exit of Atanu Chakraborty, HDFC Bank non-executive chairman late on Wednesday, unnerved several of the lender’s shareholders and fund managers as it came at a time when the war in West Asia has been weighing heavily on investor sentiment. The news of Chakraborty’s resignation led to a 8.4% crash in its stock price early on Thursday but it recovered some ground to close 5.1% down, at Rs 800.The resultant sell-off in the stock wiped off nearly Rs 66,000 crore from the bank’s market capitalisation.The day’s sell-off came after analysts turned cautious on the stock, especially because the chairman in his resignation letter said that “certain happenings and practices” within the bank were “not in congruence” with his “personal values and ethics.”
On Thursday, Macquaire, one of the leading foreign brokerages in India, removed the stock from its buy list. “Near-term underperformance may remain, while fundamentals (of the bank) remain strong with good (return on assets), at this point in time governance concerns will weigh down heavily on the stock. Investors would want more comfort from the board,” the report by Suresh Ganapathy of Macquarie said.The incident would now elevate the uncertainty surrounding the reappointment of Sashidhar Jagdishan, MD of the bank which in turn would weigh down on the stock, the report said. “Key risks include slowdown in growth and further governance issues cropping up,” Ganapathy wrote.With a foreign holding in the bank at over 45% and mutual fund holding at over 26%, HDFC Bank is one of the most widely held stocks in India. With the West Asia war pulling down stocks and funds’ NAVs, the crash in HDFC Bank stock could not have come at a worse time.
