A resignation at India's largest private bank triggered a market rout that wiped out over Rs 1 lakh crore in investor wealth in few hours.
Atanu Chakraborty stepped down as non-executive chairman of HDFC Bank, citing ethical concerns over practices he said conflicted with his personal values, sending the stock plunging nearly 9% on Thursday.
Chakraborty stressed there was no wrongdoing. "I am not pointing out any wrongdoings at the bank. My ideologies did not match with the organisation," he told NDTV Profit in an exclusive.
The bank disclosed his resignation late Wednesday. In his letter, Chakraborty wrote that certain developments over the past two years were "not in congruence" with his personal ethics. He confirmed no other material reasons for his exit.
Markets reacted swiftly. Shares opened at Rs 770, down 8.66%, hitting a fresh 52-week low. US-listed ADRs had already dropped over 7% overnight. The stock has seen a 15% decline this year.
Keki Mistry, former HDFC CEO, stepped in as interim chairman with RBI approval for a three-month term. He dismissed speculation of internal conflict. "There was no material difference between Atanu and the board," Mistry said, adding that directors were not given detailed reasons behind the ethical concerns.
Deputy MD Kaizad Bharucha will take on additional responsibilities.
Selloff Overdone?
Analysts told NDTV the selloff may be overdone, but flagged governance concerns as a near-term overhang. Macquarie said that while fundamentals remain strong with healthy return on assets, investor sentiment will stay pressured until the board offers greater clarity. The brokerage also warned that uncertainty around CEO Sashidhar Jagdishan's reappointment could further weigh on the stock.
Deven Choksey in a note called the correction a move into "deep value" territory, while Ashika Capital described it as a "buy on dips" opportunity, citing no regulatory red flags.
Most analysts called the resignation as "non material" to fundamentals, noting continuity under Jagdishan, urging both the bank and regulators to issue detailed disclosures on the concerns behind the exit.
(Disclaimer: Recommendations, suggestions given by the experts are their own. These do not represent the views of NDTV)
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