India’s largest private sector lender, HDFC Bank, has witnessed a sell-off of nearly Rs 35,000 crore worth of shares from the foreign investors during the March 2026 quarter, and the bank’s shares fell 26.2 percent during the quarter. This is the steepest decline witnessed by the bank since March 2020, when the stock dropped over 33 percent. The development comes amid the unexpected high-profile resignation by the bank’s Chairman Atanu Chakraborty.
As per bank’s shareholding pattern data, Foreign Institutional Investors (FIIs) reduced their stake by about 3.6 percent, or 47.95 crore shares, during the quarter. The number of FIIs invested in the bank declined to 2,528 at the end of March from 2,757 at the end of December 2025.
FII holding stood at 44.05 percent as of March 2026, down from 47.67 percent in the previous quarter.
In March, HDFC Bank’s part-time chairman and independent director Atanu Chakraborty resigned from his position citing concerns over “certain happenings and practices” at the bank that he said were not aligned with his personal values and ethics.
In a single day of his resignation, bank’s stock witnessed an 8.7% single-day plunge and erased $16.3 billion in market value over three sessions.
Domestic investors increased exposure
On the other hand, the domestic institutional investors increased their exposure with the Mutual funds raised their stake for the fifth consecutive quarter to 29.54 percent from 26.66 percent.
Mutual funds have bought nearly 2.88 percent stake or 38.67 crore shares worth Rs 28,293 crore during the quarter.
Further, the data suggested that the provident funds bought shares worth Rs 2,239 crore, while insurance companies added around Rs 256 crore worth of shares.
Life Insurance Corporation of India sold shares worth Rs 969 crore during the period.
After Chakraborty’s resignation, JPMorgan has maintained ‘Neutral’ rating for HDFC Bank and said, “Though Chakraborty has not alleged any misconduct, the (negative) perception may weigh on the stock until clarity emerges.
In its latest note, Jefferies said the HDFC Bank is underperforming peers amid concerns around the chairman’s exit and potential West Asia conflict impact.
