But Saurabh Mukherjea, Founder of Marcellus Investment Managers and one of HDFC Bank’s largest and longest-standing institutional shareholders, is not panicking. In fact, he has a strikingly clear-eyed reading of what is really going on — and what investors should do next.
“This is a power play at the highest levels”
Mukherjea did not mince words in his assessment. “This to me looks like power play at the highest levels,” he told ET Now, drawing a direct line between the drama unfolding in the boardroom and the broader dynamics of control over a highly valuable public institution.
His argument is straightforward: HDFC Bank has been built into a generational institution over three decades of disciplined, hard work by thousands of employees. Institutions of that scale and prestige inevitably attract those who want influence over how they are run. “If you build a great institution, there are plenty of other people who want the levers of power at that institution,” Mukherjea observed.
“All of us today are witnessing a play for the control of the levers of power in HDFC Bank.”
On the question of ethics specifically, Mukherjea was pointed. “If someone has issues with HDFC Bank’s ethics, they need to take a deep hard look at the rest of the banking sector.” As a firm that invests significant time visiting branch managers and zonal managers across India, Marcellus believes the fundamental integrity of the bank’s operations remains intact.
Why RBI cannot stay on the sidelines
Despite his confidence in the bank’s underlying health, Mukherjea acknowledged one inescapable reality: the moment an outgoing chairman uses the word “ethical” in a resignation letter filed with the exchanges, the Reserve Bank of India has no choice but to act.”The RBI cannot but get involved in some shape or form,” he said. “I cannot see how the regulator can just say, well, let business as usual carry on.” He noted that the board’s swift engagement with the RBI — and the central bank’s apparent implicit blessing of incoming Chairman Keki Mistry‘s appointment — was a reassuring sign that the situation is being managed with the gravity it deserves.
Mistry himself, Mukherjea pointed out, is a formidable and deeply credible figure in Indian financial services. “He would not have taken the role had he felt there were ethical concerns.” The board, he added, deserves credit for navigating an extraordinarily difficult situation with composure — presenting a clear succession plan rather than arriving on the call with no answers.
The buying opportunity nobody wants to talk about
Here is where Mukherjea’s analysis gets particularly interesting for investors. Despite holding HDFC Bank for eight years and having already added to positions when the stock corrected sharply after the merger, he is now watching for a specific trigger to buy again.
“If the RBI interference leads to further correction, that could open up significant buying opportunities in HDFC Bank,” he said. On asset quality, deposit gathering, and operational execution, his verdict is unambiguous: “HDFC Bank is as good as it has ever been.” The technology concerns that plagued the bank five to six years ago are largely resolved. The bank is growing both sides of its balance sheet at double digits — matching system loan growth — without resorting to aggressive deposit rates to attract capital.
On the loan-to-deposit ratio concern, Mukherjea offered important context. The post-merger integration required absorbing a wholesale-funded housing finance book into a CASA-driven bank balance sheet — a transition that was always going to take time, and that unfortunately coincided with a nationwide tightening of deposit availability. That transition, he believes, is now substantially behind the bank.
The bigger picture: Why private sector banks keep stumbling
Mukherjea raised a broader, provocative observation that deserves serious attention. Over the last two years, a steady stream of reputed private sector banks — Kotak Bank, IndusInd Bank, IDFC Bank, and now HDFC Bank — have each faced their moment of public controversy, while PSU banks have quietly posted strong asset quality numbers and seen their index rise 30–40% over the same period.
“I find it a very interesting situation,” he said, carefully stopping short of drawing explicit conclusions, but clearly inviting investors to ask harder questions about who benefits when private sector banking giants stumble in sequence.
For now, Marcellus is staying put — watching closely, trusting the fundamentals, and waiting for the moment the market’s fear creates the entry point that conviction investors have been waiting for.