HDFC Bank Shares Drop After Chief Sells Most of His Stake
(Bloomberg) -- HDFC Bank Ltd.’s shares fell after the Indian lender said its longstanding Managing Director Aditya Puri sold almost all his holdings ahead of his retirement in October.
Puri sold 7.4 million shares -- more than 95% of his stake in the nation’s most valuable bank -- for 8.43 billion rupees ($113 million) in the market from July 21 to 23, according to an exchange filing.
Shares of HDFC Bank declined as much as 3.4% on Monday morning in Mumbai. The stock has lost 15% this year, outperforming the benchmark Bankex, which is down 31%.
After 26 years at the helm, Puri is set to retire in October when he turns 70, the age limit set by the Reserve Bank of India for private bank chiefs. The lender is awaiting the RBI’s approval for one of the three candidates shortlisted to succeed him.
Puri had nearly 7.8 million shares in the lender prior to the sale, or 0.14% of outstanding stock, the filing showed. He now holds about 0.01%. The shares were alloted to Puri at different times and prices and the amount realized by him was lower than 8.4 billion rupees after accounting for tax and acquisition costs, a bank spokesman said in a statement on Sunday.
HDFC Bank has been able to shield itself during a prolonged shadow banking crisis that started two years ago. It has also maintained its strong growth momentum in the past few months even as the financial sector faced massive stress from the impact of the coronavirus pandemic.
However, more recently the lender has come under scrutiny from the central bank following allegations of improper lending at its vehicle-lending business.
©2020 Bloomberg L.P.