Jefferies rejigs key portfolios, removes HDFC Bank; bank shares slip 3 pc

  Jefferies exited HDFC Bank holdings after chairman Atanu Chakraborty resigned, citing differences. The move reduced India exposure, raised governance concerns, and impacted investor sentiment, with the stock witnessing recent declines 

New Delhi: Major global leading brokerage Jefferies has exited its holdings in HDFC Bank and reduced its India exposure across key portfolios, following the resignation of the lender’s part-time chairman Atanu Chakraborty.

In its latest “Greed & Fear” report, Jefferies strategist Chris Woods said the firm has removed HDFC Bank from its Asia ex-Japan long-only equity portfolio, global long-only equity portfolio, and international long-only equity portfolio (ex-USA). No specific reason, however, was provided for the exit.

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The brokerage has, instead, added HSBC with a 4 per cent weighting in these portfolios, replacing HDFC Bank. The move has also resulted in a marginal reduction in India’s overall weightage.

Jefferies further indicated changes in its Asia Pacific ex-Japan relative-return portfolio, reducing exposure to India and Australia by two percentage points each, while increasing Taiwan’s weight by four percentage points.

India’s weight in Jefferies’ Asia Pacific ex-Japan allocation currently stands at 13 per cent, slightly above the MSCI benchmark. The developments come after HDFC Bank disclosed on March 18 that its part-time chairman Atanu Chakraborty had resigned, citing differences with the bank over “values and ethics”.

The lender subsequently appointed Keki Mistry as interim part-time chairman. Earlier, the bank has ​appointed law firms to review the exit of ‌Chakraborty. In his resignation letter, Chakraborty referred to certain practices within the bank that were “not in congruence” with his personal values, without elaborating further.

Analysts flagged potential sentiment concerns. Anuj Singla of JPMorgan said that while no specific misconduct has been alleged, the perception could weigh on investor sentiment and increase governance risk premium on the stock.

Reports also suggest that the Reserve Bank of India (RBI) may be examining the circumstances surrounding the resignation. Shares of HDFC Bank declined as much as 3 per cent to Rs 758 on the BSE as of 12:30 am. The banking stock has declined about 14 per cent in the past one month.