HDFC Bank to be in focus today on Dalal Street. Here's all you need to know

The stock has seen a steep decline recently. In just two sessions, the share price fell from around Rs 843 to Rs 781 on the NSE, marking a drop of over 7%. After closing at Rs 781 on Friday, the stock is now only Rs 11 above its 52-week low of Rs 770.

In Short

• HDFC Bank shares fell over 7% in two sessions, near 52-week low
• Chairman Atanu Chakraborty resigned amid governance concerns
• Three senior staff dismissed over Credit Suisse AT-1 bond probe

HDFC Bank shares are likely to remain in focus today after a sharp fall in the last two trading sessions of last week and a series of developments linked to governance and overseas operations.

The stock has seen a steep decline recently. In just two sessions, the share price fell from around Rs 843 to Rs 781 on the NSE, marking a drop of over 7%. After closing at Rs 781 on Friday, the stock is now only Rs 11 above its 52-week low of Rs 770.

The fall has not been limited to just the past two days. In March 2026 so far, HDFC Bank shares have dropped from Rs 887.75 to Rs 781, a decline of more than 12%. This puts the stock on track for its worst monthly fall since March 2020. During that period, the stock had fallen 26.8% as markets crashed due to the Covid-19 pandemic.

GOVERNANCE ISSUES AND LEADERSHIP CHANGE

The recent pressure on the stock also comes at a time when the bank is going through changes at the top level. Chairman Atanu Chakraborty has resigned, citing differences related to personal values, ethics, and certain internal practices.

Following his exit, Keki Mistry has been appointed as interim non-executive chairman for three months to ensure continuity. The Reserve Bank of India (RBI) has clarified that it does not see any material concerns regarding the bank’s conduct, governance, or financial position.

At the same time, the bank has taken action internally. It has terminated three senior employees after an internal investigation into issues at its Dubai branch.

ACTION AGAINST SENIOR EXECUTIVES

The employees who have been dismissed include Sampath Kumar, group head of branch banking, Harsh Gupta, executive vice president for Middle East, Africa and NRI business, and Payal Mandhyan, senior vice president.

The action follows an internal probe into the alleged mis-selling of Credit Suisse AT-1 bonds to NRI clients through the bank’s UAE operations. The matter had drawn attention after complaints from investors and regulatory scrutiny.

HDFC Bank said it had identified gaps in client onboarding requirements at its DIFC branch in the UAE. The bank added that it has completed a detailed review and taken corrective steps as per its internal policies. It also said personnel changes have been made in line with its conduct regulations.

WHAT ARE AT-1 BONDS AND WHAT WENT WRONG

AT-1 bonds are debt instruments that have some features similar to equity. They offer higher returns compared to normal bonds but come with higher risk. These bonds do not gain value like shares, and in case a bank faces financial trouble, the value of these bonds can be written off.

In case of bankruptcy, AT-1 bondholders are among the last to be repaid.

According to the allegations, staff at the bank’s Dubai and Bahrain branches persuaded NRI clients to move their FCNR deposits from India to Bahrain. These bonds were presented as fixed-maturity products with assured returns, which is not accurate.

It is also alleged that investors were asked to sign blank documents and were not fully informed about the risks, including the perpetual nature of these bonds.

The issue became more serious after these bonds were written off during the UBS-led bailout of Credit Suisse, leading to losses for investors.

The probe into the matter started in January 2025 after complaints from NRI investors. Harsh Gupta and Payal Mandhyan were suspended during the investigation. The probe concluded on March 18, leading to the termination of the employees.

The Dubai Financial Services Authority has also barred the bank from onboarding new clients in the emirate. In addition, the bank is facing investor lawsuits linked to this issue.

MARKET VIEW AND BROKERAGE OUTLOOK

Despite the recent fall and concerns around governance, brokerages continue to track the stock closely.

Axis Securities said that on the operational side, HDFC Bank continues to perform in line with its guidance and is working towards returning to pre-merger levels across key metrics. The brokerage noted that execution remains strong.

However, it also pointed out that the stock has already seen a sharp correction and is now trading at lower valuation levels compared to its historical average.

The brokerage said that any improvement in the stock’s valuation will depend on better performance and stability in return on assets. The current developments, especially related to leadership changes and governance concerns, could delay any near-term recovery in valuations.

Axis Securities added that clarity on leadership succession, including the appointment of a permanent chairman and progress on the managing director and CEO re-appointment, will be key triggers for the stock.

It has maintained a buy rating on HDFC Bank shares with a revised target price of Rs 1,020 per share, which suggests a potential upside of 28% from current levels.

The brokerage has reduced its valuation multiple and now values the stock at 2.1x September 2027 estimated adjusted book value, compared to 2.5x earlier. It has also assigned a subsidiary value of Rs 135.

With the stock close to its 52-week low, recent sharp declines, leadership changes, regulatory developments, and action against senior employees, HDFC Bank shares are expected to remain in focus on Dalal Street today.

Investors are likely to watch for further clarity on management stability, regulatory updates, and any signs of recovery in the stock after the recent fall.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)

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