HDFC Bank Share Price Recovers, Ending Three-Day Losing Streak

HDFC Bank Share Price Turns Green Amid Governance Concerns

In a reversal of fortunes, HDFC Bank's share price rose 0.13% on Monday's trading session on the National Stock Exchange (NSE), after falling for three consecutive sessions last week. The stock opened at ₹749 apiece, compared to its previous close of ₹744.55 on Friday last week. HDFC Bank shares had fallen 5% over the last three sessions.

Governance Concerns Reignite

A recent report by The Indian Express has reignited concerns over governance standards at India's largest private-sector bank. According to the report, HDFC Bank allegedly paid ₹45 crore to the Maharashtra State Road Development Corporation (MSRDC), with the transactions booked as marketing expenses to provide higher returns on deposits. This development comes just months before the scheduled October reappointment of Managing Director and CEO Sashidhar Jagdishan.

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Market experts believe that the development is unlikely to affect Jagdishan's reappointment prospects. However, the report has sparked concerns over the lender's governance practices. The report further stated that an undisclosed development occurred on 12 March, six days before former chairman Atanu Chakraborty stepped down, when the board's audit committee directed a formal internal vigilance probe into the payments made during FY24 and FY25.

Bank's Response

HDFC Bank has responded to the allegations, stating that it has robust internal oversight, audit, and control processes and systems in place. The bank assured that all issues are dealt with in accordance with its established norms, and the full process is always followed before final determination post any internal review.

Employee Stock Options Scheme

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In a separate development, HDFC Bank informed its shareholders that it has allotted 13,16,960 equity shares to its employees under its Employees Stock Options Scheme (ESOS) on May 29. The bank's paid-up share capital has increased from 15,39,63,32,196 equity shares of Re. 1/- each to 15,39,76,49,156 equity shares of Re. 1/- each.

Share Price Trend

HDFC Bank's share price trend has largely remained negative amid weak market sentiments. The private lender stock has fallen by over 5.20% in a week, 3.34% in a month, and 25% on a year-to-date (YTD) basis. Looking at the broader level, HDFC Bank shares have descended 7% in three years and 1.32% in five years.