GREED & Fear report: HDFC Bank share price remained under pressure on Monday, March 30, extending losses after falling more than 3% in the previous session on Friday, March 27, after Jefferies’ Christopher Wood removed the private lender from two key portfolios, according to the latest GREED & Fear report.
The private sector lender has declined nearly 6% over the last two sessions. In Monday’s trade alone, the stock fell as much as 2.3% to hit an intraday low of ₹738.35.
In his latest GREED & Fear report, Wood said he had dropped HDFC Bank from both his Asia ex-Japan and global long-only equity portfolios, and shifted the allocation to HSBC.
“An investment in HSBC will also be introduced with a 4% weighting by removing the investment in HDFC Bank,” he wrote, while outlining changes to the Asia long-only portfolio, and said a similar adjustment was being made in the global and international mandates.
The latest pressure on the stock comes after the abrupt resignation of part-time chairman Atanu Chakraborty, which has raised fresh concerns over corporate governance at the country’s largest private lender.
Wood has also cut India’s weight by 2 percentage points in his Asia Pacific ex-Japan relative return portfolio, compared with a 12.5% index weight, while Taiwan’s underweight has been reduced by four percentage points.
“The weighting in Australia and India will be reduced by two percentage points each, while the weighting in Taiwan will be increased by four percentage points to a smaller underweight,” the report noted.
What happened at HDFC Bank?
Chakraborty resigned with immediate effect, saying that certain developments and practices at the bank over the past two years were not in line with his “personal values and ethics.” His departure, despite being in his second term after joining the board in May 2021, has made investors more cautious and intensified scrutiny around the bank.
After his resignation, HDFC Bank said it was not aware of the specific reasons behind his decision and added that Chakraborty had not offered detailed explanations despite repeated queries.
“The board is not aware as to why the Chairman resigned. In fact, they repeatedly asked him and he didn’t give any specific reasons,” Macquarie noted, adding that new chairman Keki Mistry hinted at a possible relationship issue between the former chairman and the management—something analysts see as a potential power struggle.
Mistry, however, sought to calm concerns around governance issues. “Based on our discussions, there were no specific happenings and practices that were brought to our attention. There were no specific operational or other issues that have been highlighted,” he said during a conference call.
Since then, markets regulator Sebi has also started a preliminary review of the claims made in the resignation letter and whether other directors were aware of any material information and failed to document it, according to a Reuters report.
The Reserve Bank of India, which is the primary regulator in the matter, said last week that it had found “no material concerns on record as regards its (bank’s) conduct or governance”.
HDFC Bank also said last week that it had appointed external law firms to independently examine the concerns raised in the resignation letter.
Other brokerage calls
Brokerage firm Macquarie Capital had also removed HDFC Bank from its ‘Marquee Buy’ list following the abrupt resignation earlier this month.
Even so, the brokerage maintained its ‘Outperform’ rating on the stock with a 12-month target price of ₹1,200. Macquarie said governance-related uncertainties could continue to weigh on HDFC Bank shares in the near term, although the bank’s core fundamentals remain intact.
“Near-term underperformance may persist. While fundamentals remain strong with healthy return on assets (RoA), governance concerns will weigh heavily on the stock at this point,” the brokerage had said.
It added that investors would be looking for greater clarity and reassurance from the board, particularly as uncertainty remains around CEO Sashidhar Jagdishan’s reappointment, which is scheduled for review in October 2026.
“Investors would seek greater comfort from the board. Additionally, uncertainty around Sashi’s reappointment could act as an overhang. Key risks include a slowdown in growth and any further governance issues,” it added.
Meanwhile, media reports said global brokerage JPMorgan upgraded the stock to ‘Overweight’ from ‘Neutral’, citing an improved risk-reward after the recent sharp correction. The brokerage has set a price target of ₹1,010 on the stock, indicating a potential upside of around 33% from current levels.
JPMorgan said HDFC Bank’s valuation has declined to its lowest price-to-book (P/B) level since the merger announcement in April 2022, and is now at a 16-year low of 1.5x FY28 estimated P/B for the parent entity, following a 24% year-to-date fall in the stock price.
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