HDFC Bank shares rise after RBI eases curbs, analysts stay positive

Mumbai: Shares of HDFC Bank jumped as much as 2.3 per cent before ending marginally lower from Tuesday’s close on Wednesday after the Reserve Bank of India’s move the previous day to partially lift the digital ban on the private lender. After a gap of almost nine months, RBI allowed the bank to issue new credit cards. However, the temporary ban for introducing new digital initiatives continues.

The gains in HDFC Bank fizzled out as concerns remain over RBI’s reluctance to give a complete waiver on digital initiatives. All brokerages, however, said that the bank will soon make up for lost market share with high credit card issuances over the next couple of months. The stock ended down 0.13 per cent at Rs 1,512.90 after touching a high of Rs 1,550 during the day. It has gained 5.3 per cent so far in 2021, while Sensex has gained 16.5 per cent during the same period.

JP Morgan sees the RBI move as a partial positive. “RBI’s reluctance to give a complete waiver for all digital initiatives is a negative and seems to suggest that additional clearances will remain milestones linked, delaying full normalcy in rolling out digital initiatives," said JP Morgan, which has an ‘overweight’ rating on HDFC Bank with a target price of Rs 1,800.


In December 2020, the RBI temporarily stopped all digital launches of HDFC Bank planned under Digital 2.0, including sourcing of new credit cards.