HDFC Bank shares down 20% in 2026 so far. Time to buy as the governance cloud clears up?

The shares of heavyweight HDFC Bank have seen a sharp downturn, falling around 20% so far this year as governance worries kept its 42 lakh shareholders on the edge. As India’s private lender addresses concerns, analysts explained why fresh entry by only fishing for a bottom should be avoided.

HDFC Bank shares saw a sharp selloff in March this year after its former part-time Chairman Atanu Chakraborty resigned, stating that some practices within the bank were not matching with his personal values and ethics. "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. This is the basis of my aforementioned decision. I confirm that there are no other material reasons for my resignation other than those stated above," Chakraborty wrote in his resignation letter.

The stock lost 12% in three days after his resignation on March 18, leading to a massive share sell-off that wiped off around Rs 1.6 lakh crore from the bank’s market value in just three sessions. The private lender then took several measures to address concerns.


HDFC Bank recently appointed Rajiv Kumar, a former IAS officer and ex-Chief Election Commissioner of India, as its Part-time (Non-Executive) Chairman, concluding a months-long search after the abrupt exit of Atanu Chakraborty in March.

Also read: HDFC Bank valuations attractive, banking sector ready for next growth phase, says Sandip Sabharwal

HDFC Bank on Monday also announced that its board has approved the appointment of Puneet Sharma as the Chief Financial Officer - Designate (CFO-Designate) with effect from September 1 and as Chief Financial Officer with effect from December 1.

India’s largest private lender by both assets and market capitalisation also appointed Jigar Shah as the general counsel. He is currently managing director and head of compliance at a local subsidiary of bulge-bracket private equity firm KKR.

Also read: HDFC Bank ropes in KKR Managing Director Jigar Shah to head Legal & Compliance

Should you buy HDFC Bank shares now?

HDFC Bank has strengthened its leadership team with the appointment of Puneet Sharma as CFO designate and Rajiv Kumar as part-time chairman, said Dnyanada Vaidya, Research Analyst of BFSI at Axis Direct. The re-appointment of the current MD CEO remains a key monitorable and would ensure seamless strategy execution, she added.

“Operationally, HDFC Bank’s growth has picked up as it exited FY26, and the bank remains well-positioned to sustain a healthy growth trajectory, supported by steady momentum across segments. Amidst limited opportunities for NIM expansion, the bank’s focus remains on improving RoA by leveraging investment to drive operational efficiency and maintaining benign credit costs supported by stable asset quality metrics,” the analyst said.

The independent legal review commissioned by the board found nothing to substantiate the allegations, the RBI has flagged no material governance concerns, a new part-time chairman is in place, and the path for the chief executive's reappointment ahead of his October term end has cleared, highlighted Harshal Dasani, Business Head atINVasset PMS.

Axis Direct continues to favour larger banks presently given healthy growth and earnings visibility and attractive valuations. However, Dnyanada Vaidya does not recommend fresh entry in HDFC Bank at the current juncture and prefers ICICI Bank and Kotak Mahindra Bank.

“The relevant question is not timing a bottom but whether that discount is justified by the franchise, and on current numbers that is hard to argue. The setup resolves higher if the reappointment is formally ratified and no fresh disclosures emerge; it stays capped if the regulatory follow-through on the Dubai matter widens. Sell-side targets currently sit in the Rs 940 to Rs 1,100 range against a price near Rs 800,” according to Dasani.

Also read: Churn at private banks' finance function, 2 CFOs quit

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)