HDFC Bank Fall Wipes Out Investor Wealth

Retail investors lost nearly ₹9,500 crore in paper (notional) wealth as shares of HDFC Bank continued to fall for the third straight day on Friday. The decline came after concerns over the resignation of part-time Chairman Atanu Chakraborty, who stepped down citing a “lack of alignment with personal values and ethics” at the bank.

A large number of small investors were affected by this fall. Around 35.39 lakh retail investors, each holding shares worth up to ₹2 lakh, owned about 9.41% of the bank as of the December quarter. The value of their holdings dropped from ₹1,22,512 crore on March 17 to ₹1,13,039 crore on Friday, resulting in a loss of about ₹9,472 crore.

Foreign portfolio investors (FPIs), who hold a major share in the bank, were hit even harder. Their total notional loss was around ₹47,986 crore. These investors held about 47.67% stake in HDFC Bank during the same period.

Mutual funds also faced losses, with their holdings losing nearly ₹26,837 crore in value. Several large institutions have significant investments in the bank, including Life Insurance Corporation of India (LIC), which holds a 4.77% stake. Other major investors include the Government of Singapore, Vanguard Total International Stock Index Fund, and Government Pension Fund Global.

Among domestic funds and exchange-traded funds (ETFs), SBI Nifty 50 ETF, ICICI Prudential Large Cap Fund, and HDFC Flexicap Fund hold notable stakes in the bank.

On Friday, HDFC Bank shares closed at ₹780.45, down 2.41% for the day. The continued fall in the stock has raised concerns among investors, especially after the chairman’s sudden resignation.

Overall, the situation has created uncertainty in the market, with both small and large investors facing significant losses. Experts say that future movement in the stock will depend on how the bank addresses governance concerns and restores investor confidence.