ET NEWS

HDFC Bank's American Depositary Receipts (ADRs) on New York Stock Exchange (NYSE) fell another 4%, indicating extending of losses after the stock's sharp correction on Thursday that saw it shed about 5% and briefly erase nearly Rs 1 lakh crore in investor wealth. The continued weakness in ADRs reflects lingering investor concerns following the abrupt resignation of former chairman Atanu Chakraborty, even as the bank's management and board have sought to downplay the development.On Thursday, the stock witnessed heavy selling pressure, with market cap erosion at one point touching around Rs 1 lakh crore. The selloff was triggered after Chakraborty stepped down, citing that certain "happenings and practices" within the bank over the past two years were not aligned with his personal values and ethics. However, the absence of specific details has added to uncertainty.HDFC Bank chief executive and managing director Sashidhar Jagdishan said the board had urged Chakraborty to reconsider his resignation and elaborate on the concerns. "Every board member" attempted to persuade him to withdraw or clarify his remarks, but he declined, Jagdishan said.Board members also indicated they were "baffled" by the move, noting that no specific issues were formally raised during discussions. Despite the sharp market reaction, analysts are increasingly viewing the correction as an opportunity rather than a signal of deeper concerns.Deven Choksey said the fall has pushed the stock into a "deep value" zone, though he acknowledged that valuations may now reflect a discount due to recent developments.Ishan Tanna of Ashika Capital said the situation appears tactical rather than structural. "The recent resignation of the Chairman looks more like a buy-on-dips opportunity rather than a structural concern," he said, adding that the bank’s long-standing track record of strong processes provides comfort.Tanna also highlighted that management commentary points to differences in value systems rather than any regulatory or compliance issues. "It seems to be more about differences in value systems, and not related to any regulatory or compliance problems," he said.This view is broadly echoed by market participants. According to sources cited by ET Now, the resignation was not linked to any concerns raised by the Reserve Bank of India but stemmed from prolonged differences over certain practices.Paresh Bhagat, CIO at Veer Growth Fund, said the development does not materially alter the bank's fundamentals. "The absence of any stated business or financial concerns reinforces that this is not an operational signal," he said, adding that leadership continuity at the CEO level remains intact.While near-term sentiment remains cautious, the Street appears to be focusing on valuations and long-term fundamentals, even as clarity on the developments surrounding the resignation remains limited.

SBI Mutual Fund, India's largest asset management company, has filed its draft red herring prospectus (DRHP) with market regulator Sebi for an IPO, which will be entirely an offer for sale (OFS) by its promoters. The offer will see the sale of up to 20.37 crore equity shares of face value Re 1 each, with no fresh issue component, implying that the company will not receive any proceeds.State Bank of India, the promoter, will offload up to 12.83 crore shares, while Amundi India Holding will sell up to 7.53 crore shares as part of the OFS. The weighted average cost of acquisition stands at Rs 0.15 per share for SBI and Rs 4.35 per share for Amundi. The total issue size in rupee terms has not yet been disclosed.SBI Mutual Fund operates as the investment manager to its flagship mutual fund business and also offers portfolio management services (PMS), alternative investment funds (AIFs) and offshore advisory services.The company serves over 1.6 crore unique investors as of December 2025 and manages mutual fund average assets under management (MAAUM) of Rs 6,06,139 crore, accounting for 48.05% of total mutual fund MAAUM.It holds a 15.4% market share by QAAUM, making it the largest AMC in India. The firm also dominates adjacent segments, with a 39% market share in PMS and 61% in specialised investment funds. Its SIP franchise remains one of the strongest in the industry, with 1.57 crore live SIPs, reflecting deep retail penetration.The AMC benefits from a dual-parent structure, combining SBI’s extensive domestic distribution network with Amundi’s global asset management expertise.Financial performanceSBI Mutual Fund has reported strong and consistent financial growth over recent years. For the nine months ended December 2025, the company reported revenue from operations of Rs 3,251 crore and profit after tax of Rs 2,433 crore.For FY25, revenue stood at Rs 3,598 crore, while profit after tax came in at Rs 2,540 crore, reflecting high profitability and operating leverage in the asset management business.The company operates a debt-free balance sheet and has maintained robust return ratios, with return on net worth at 33.77% in FY25. Net worth stood at Rs 72,720 crore as of December 2025.IPO structure and positioningGiven that the issue is entirely an OFS, the listing is primarily aimed at providing liquidity to existing shareholders and unlocking value, rather than raising growth capital. The proposed listing comes at a time when India's mutual fund industry continues to see strong inflows, driven by rising retail participation, SIP growth and financialisation of savings.The IPO is expected to draw strong institutional and retail interest given SBI Mutual Fund's dominant market position, strong profitability and scalable business model.