Foreign investors sold around Rs 35,000 crore worth of shares in HDFC Bank during the March 2026 quarter. HDFC Bank shares fell nearly 26.2 percent during the quarter, marking their steepest decline since March 2020.
The share price of HDFC Bank as of now is Rs.751. The share price has been continuously decreasing from Rs.1050.
According to the latest shareholding pattern data, 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 contrast, domestic institutional investors increased their exposure in the Bank. Mutual funds raised their stake for the fifth consecutive quarter to 29.54 percent from 26.66 percent, buying about 2.88 percent stake or 38.67 crore shares worth Rs 28,293 crore during the quarter. Provident funds bought shares worth Rs 2,239 crore, while insurance companies added around Rs 256 crore worth of shares. However, Life Insurance Corporation of India sold shares worth Rs 969 crore during the period.
But Why is Share Price of HDFC Bank Declining?
The stock’s decline has been driven by multiple factors, including the unexpected resignation of HDFC Bank Chairman Atanu Chakraborty. He said in his resignation letter that “certain happenings and practices” over the past two years did not align with his values, raising governance concerns. Investor sentiment was also affected by reports that SEBI is reviewing the resignation letter.
The bank has faced challenges following the top management transition since October 2020, along with regulatory actions such as the suspension of its credit card business by the RBI and the merger with HDFC Ltd, which impacted growth and margins.
The management, however, has indicated confidence in recovery, supported by easing regulatory pressures and a pause in the rate cycle, and said recent senior management exits will not derail the turnaround.
There are concerns also around internal governance, post-merger integration, a high loan-to-deposit ratio and allegations of employee misconduct in bond sales. Reports indicate the bank has taken action against senior executives over alleged mis-selling of Additional Tier 1 bonds.
Amid these developments, Jefferies has reduced its exposure to HDFC Bank across its Asia (excluding Japan), global and international long-only portfolios, removing the stock from its investment lists.
