Why did Raamdeo Agrawal sell HDFC Bank stock early?

He sold HDFC Bank shares due to concerns about a foreign partner's potential exit, fearing it would negatively impact the bank.

When did Raamdeo Agrawal invest in HDFC Bank?

Raamdeo Agrawal first invested in HDFC Bank in 1995, shortly after it was listed, when the stock was trading at ₹40.

What is Raamdeo Agrawal's lesson from the HDFC Bank decision?

His key takeaway is that selling great businesses too early can be more detrimental to wealth creation than buying poor stocks.

Home / Business and Economy / Raamdeo Agrawal's Regret: Missing HDFC Bank's Wealth Boom

Raamdeo Agrawal's Regret: Missing HDFC Bank's Wealth Boom

12 Dec

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Summary

Investor sold HDFC Bank shares at ₹52.50 due to partner concerns.
He bought shares in 1995 when the stock was ₹40.
Missing HDFC Bank's rise cost him significant long-term returns.

Raamdeo Agrawal's Regret: Missing HDFC Bank's Wealth Boom

Motilal Oswal Financial Services Chairman Raamdeo Agrawal identified selling his HDFC Bank shares prematurely as a significant investment regret. He had invested in 1995 with strong conviction, seeing potential for HDFC Bank to become India's HSBC, particularly influenced by structural value shifts in banking.

Agrawal's decision to sell at ₹52.50 was prompted by information suggesting a foreign partner's departure. He worried this would destabilize the bank, a move he now considers a misjudgment. The stock price has not fallen below this level since his sale.

This early exit led Agrawal to forgo substantial long-term gains as HDFC Bank evolved into one of India's largest and most valuable financial institutions. His experience underscores his philosophy that conviction is crucial, but remaining invested through market fluctuations is paramount for wealth creation.