A huge fall of about 9 percent was recorded in the shares of HDFC Bank as soon as the market opened. Due to this sharp selling, the company’s market capitalization (market cap) of Rs 1 lakh crore was completely wiped out within just a few minutes. In fact, not only the normal fluctuations of the market are responsible for this historic decline, but the main reason for this is a big and shocking news related to the leadership of the bank.
Part-time Chairman and Independent Directors of the Bank Atanu Chakraborty has suddenly resigned from his post. The reason given by him in his resignation further increased the uneasiness of the investors. Chakraborty said that in the last two years, there were some practices within the bank that were not in line with his personal values and ethics. When a top executive of a top bank steps down on ethics grounds, it is natural to cause panic among investors expecting transparency.
Is there any internal conflict going on within the bank?
After this high-profile resignation, questions began to arise among investors whether there was a power struggle going on among the top management of the bank. Handling this situation, the management of the bank immediately clarified. He clarified that there is no hidden reason behind Chakraborty’s resignation other than the reasons mentioned in the letter. Meanwhile, after the approval of the Reserve Bank of India (RBI), Keki Mistry has been appointed interim part-time chairman for the next three months. Mistry categorically denied rumors of internal strife during a conference call. He said that there is no power struggle of any kind in the bank and there were no fundamental differences between the board and the former chairman.
The worst decline since the Covid crash of 2020
This fall in the shares of HDFC Bank is historic. Earlier, such a big fall in this giant’s stock was seen on March 23, 2020, when the stock fell by about 13 percent due to the fear of the Covid-19 pandemic. As soon as the market opened on Thursday, the market cap of the bank fell by 9 percent to around Rs 11.85 lakh crore. However, by 10:20 am there was a slight recovery in the stock and it was trading at a loss of 5 percent. According to Anand James, Chief Market Strategist, Geojit Investments, the stock has gone below its key support level. He believes that if the stock slips below the crucial level of Rs 810, it may fall further and dive to Rs 748.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money related decisions.