The sharp decline in the share price comes amid leadership worries after part-time Chairman and independent director Atanu Chakraborty stepped down, stating that he observed certain practices at the company over the last two years that did not align with his personal values and ethics.
“We confirm that there are no reasons other than those mentioned in the said letter, for the resignation of Mr Chakraborty,” the lender clarified. Keki Mistry, meanwhile, has been appointed as an interim part-time Chairman for a period of three months, as approved by the RBI.
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After Chakraborty’s resignation drew massive media attention, Mistry denied speculations around any internal power struggle. “There was no power struggle in the bank. Differences on minor issues come up from time to time. There was no material difference between Atanu and the board,” he said during a conference call.
HDFC Bank shares plunged 9% at open, dragging its market capitalisation down to a little over Rs 11.85 lakh crore. The stock later made some recovery and was trading around 5% lower, as seen at 10.20 am. The stock’s previous worst fall was recorded back on March 23, 2020, when the heavyweight stock declined 12.7%.
By breaking below Monday’s low, HDFC Bank has clearly stretched much beyond benchmark indices which have largely held above their respective lows of Monday, said Anand James, Chief Market Strategist at Geojit Investments. “While this gives hopes of a mean reversion swing higher, we are concerned that the slippage past Jan 2025’s low of Rs 810 is suggestive of a further range expansion favouring more downsides. Projected objective is at Rs 748, which would be invalidated only if the stock closes back above Rs 810,” he added.Also Read | HDFC Bank douses boardroom conflict talk after Atanu Chakraborty’s sudden exit as part-time chairman
Today’s sharp crash in the stock prices pulled down the benchmark indices Sensex and Nifty, which plunged over 2% at opening. Sensex crashed 1,953 points to open at 74,751, while Nifty 50 declined over 580 points to begin the session at 23,198. The sharp selloff wiped off more than Rs 7 lakh crore in just a few minutes since opening from the total market capitalisation of all companies listed on BSE, dragging it down to Rs 432 lakh crore.
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