Shares of HDFC Bank remained in focus on Monday after foreign institutional investors (FIIs) reduced their stake in the country’s largest private sector lender during the March quarter, reflecting broader volatility in the Indian equity markets. The sell-off comes amid global uncertainties, including rising crude oil prices and geopolitical tensions linked to the US-Iran conflict.
According to shareholding data available on the NSE, FIIs offloaded a 3.62 per cent stake in HDFC Bank during the quarter, selling approximately 47.95 crore shares. Their total holding declined to 44.05 per cent from 47.67 per cent in the December quarter. The number of FII investors also fell to 2,528 from 2,757 over the same period, indicating a broad-based reduction in exposure.
The March quarter witnessed one of the largest foreign outflows in recent years. FIIs sold equities worth ₹1.18 lakh crore in March alone, taking total outflows for the quarter to ₹1.31 lakh crore, according to NSDL data. Market participants attribute the sell-off to global risk aversion, rising oil prices, and uncertainty stemming from geopolitical developments.
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Domestic institutional investors, however, moved in the opposite direction. Mutual funds increased their stake in HDFC Bank by around 2.88 per cent during the quarter, taking their total holding to 29.54 per cent. Meanwhile, Life Insurance Corporation of India (LIC) marginally reduced its stake to 4.67 per cent, indicating selective portfolio adjustments among domestic players.
Despite the selling pressure, HDFC Bank shares showed resilience in Monday’s trading session, closing 2.68 per cent higher at ₹771 apiece, outperforming the NSE Nifty 50 index, which declined 2.09 per cent. The stock touched an intraday high of ₹772.75. However, the broader trend remains weak, with the stock down 12.27 per cent over the past year and 22.21 per cent year-to-date.
The bank’s shares also faced significant pressure during the March quarter, declining 26.19 per cent, including a sharp 17.60 per cent fall in March following the sudden resignation of chairman Atanu Chakraborty. Despite this, market sentiment remains largely positive, with 46 out of 47 analysts maintaining a ‘buy’ rating. The average 12-month target price of ₹1,112.47 suggests a potential upside of over 44 per cent from current levels.
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