Jefferies Exits HDFC Bank Following Atanu Chakraborty's Resignation, Reduces India Portfolio Weightage

Company Updates: Jefferies Exits HDFC Bank Holdings

Jefferies, an international brokerage firm, has exited its holdings in shares of HDFC Bank, a private lender, while trimming its India weightage. This decision follows the resignation of Atanu Chakraborty, part-time chairman and independent director, from the HDFC Bank board.

As per Jefferies' latest Greed & Fear report, the brokerage has reduced its exposure to HDFC Bank stock across three key portfolios: Asia ex-Japan long-only equity portfolio, global long-only equity portfolio, and international long-only equity portfolio (ex-USA). The brokerage has replaced HDFC Bank with a 4% weighting in HSBC.

The changes have also led to a reduction in India weightage for the brokerage. Specifically, the weighting in Australia and India will be reduced by two percentage points each, while the weighting in Taiwan will be increased by four percentage points to a smaller Underweight.

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India's weightage in Jefferies' Asia Pacific ex-Japan asset allocation is currently at 13%, which is 50 basis points higher compared to the MSCI AC Asia Pacific ex-Japan weightings.

HDFC Bank shares have been impacted by the resignation of Atanu Chakraborty, with the stock quoting at Rs 761.35 on the NSE at 11:35 a.m. today, down by 2.7%. Over the past month, the private lender's stock has tumbled over 14% on the bourses.

RBI is likely to investigate the core issues leading to the resignation of Atanu Chakraborty, which may have implications for the company's governance risk premium. Anuj Singla, analyst at J.P.Morgan, has noted that the perception of governance risk may weigh on sentiment until credible steps are outlined and delivered.