HDFC Bank stock falls over 4% as chairman resigns on ethical grounds

The sudden resignation of HDFC Bank part-time chairman Atanu Chakraborty on ethical concerns has adversely impacted the bank’s share prices besides putting pressure on the management and board to clarify doubts on lapses if any. 

On Thursday (March 19, 2026), the stock crashed 4.45% on BSE soon after opening even as the benchmark index the Sensex fell over 2% owing to developments in West Asia. 

On Wednesday (March 18), the HDFC Bank stock had closed lower despite the indices being in the positive territory before the resignation news came out, raising speculations wherever there was insider trading at the bank. 

The Bank on Thursday clarified to stock exchanges that though the chairman’s resignation letter was dated March 17, it was received by the Bank on March 18 after market hours. 

HDFC Bank, India’s largest private sector bank, on Wednesday night announced the resignation of Atanu Chakraborty as part-time Chairman and Independent Director with immediate effect, along with the appointment of HDFC veteran Keki Mistry as Interim Chairman for a three-month period. 

JP Morgan says stock likely to trade weakly

JP Morgan said the chairman’s exit adds to macro headwinds.

“Two things stood out to us in the resignation letter. Mr. Chakraborty cited the following as a key reason for stepping down: ‘Certain happenings and practices within the bank, that I have observed over the last two years, are not in congruence with my personal Values and Ethics’ and Benefits of HDFC Bank-HDFC Ltd merger are yet to fully fructify,” it said. 

JP Morgan believes the stock is likely to trade weakly following the resignation announcement, with the impact to be further amplified by a softer macro backdrop amid geopolitical uncertainties.

“Reasons for resignation do raise some concerns about potential material disagreements between board & co’s leadership, risking board‑management cohesion and, in turn, future decision‑making and execution,” JP Morgan said.

“While the letter does not allege specific misconduct, perception alone can weigh on sentiment until credible steps are outlined and delivered,” it added.

“The Bank’s valuation multiples have already de-rated meaningfully, and this development is likely to prolong recovery, making normalization slower than previously anticipated,” Kotak Institutional Equities said. 

“We remain skeptical about an imminent re-rating. Valuation upside is unlikely to materialize until current issues are decisively resolved & news-flow becomes materially less concerning,” it added. 

UBS in a note said, “While there are no other details available, this could put near term pressure on the stock price.”