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Ethics Clash: HDFC Bank's Stock Hits 52-Week Low Amid Exit
27 Mar
Summary
- Former chairman resigned citing value and ethics differences.
- HDFC Bank's stock fell sharply, losing Rs 1 lakh crore in market cap.
- SEBI is reviewing the resignation letter for fiduciary duty failures.
HDFC Bank's former part-time chairman, Atanu Chakraborty, resigned on March 18, 2026, citing a misalignment with his values and ethics, with no other material reasons for his departure. This event sent shockwaves through the market, causing HDFC Bank's stock to plummet by over 9% the following day, resulting in a market capitalization loss of approximately Rs 1 lakh crore. The stock later hit a fresh 52-week low of Rs 741 on March 23, 2026.
In response to the situation, Keki Mistry, a veteran from the HDFC group, was appointed as the interim chairman for three months. The bank also appointed external domestic and international law firms to review Chakraborty's resignation letter, aiming to reinforce its governance standards. Simultaneously, the Securities and Exchange Board of India (SEBI) initiated a preliminary review of the letter, investigating potential failures in fiduciary duties by former chairman and directors.
Adding to the turbulence, HDFC Bank terminated three senior executives from its Dubai branch for alleged roles in mis-selling high-risk bonds. This led to regulatory action by the Dubai Financial Services Authority, barring the branch from onboarding new clients. Despite these challenges, some brokerages maintain a positive outlook, with ratings like 'Buy' and target prices suggesting potential upside.
