Even before the Iran war and Chairman Atanu Chakraborty’s sudden resignation, investors were betting against HDFC Bank Ltd., with open positions in the stock’s active futures contracts at a record high, according to Bloomberg data tracked by Mint.
On February 25, the number of active futures contracts on HDFC Bank stock reached an all-time high of 497,000 versus 24,188 at the expiry of the February series of derivatives the day before. The number increased to 504,000 after the chairman stepped down on Thursday (19 March 2026).
Since the share price has declined by 12% along with the increase in open positions, the buildup is viewed as bearish.
“The shorts are likely to be driven by foreign investors who are the largest category of shareholders in the bank…,” Rajesh Palvia, head of research (derivatives and technical) at Axis Securities Ltd, told Mint. He does not expect HDFC Bank shares to rise any time soon, as foreign investors continue to sell Indian stocks amid the escalating war in Iran and rising crude oil prices.
flight of foreign capital
In the first half of March, FII outflows from Indian equities became the highest in ~18 months, pushing the Nifty 50 to its worst fortnight since the pandemic in March 2020.
Foreign investors have sold shares worth ₹As of March 18, it stood at Rs 52,704 crore, according to National Securities Depository Ltd data. Financial stocks, which include stocks like HDFC Bank, accounted for 60% of the total outflows.
FIIs sold shares on Thursday ₹While domestic institutional investors bought shares worth Rs 7,558.19 crore. ₹3,863.96 crores.
a perfect storm
Wiped out by Chakraborty’s sudden resignation ₹HDFC Bank’s market cap falls to Rs 69,000 crore after share price falls 5.3% ₹798.20 each on Thursday. value of shares ₹Rs 14,340 crore was exchanged – this was about 12% of the total trading volume of NSE and BSE. ₹According to Bloomberg data, Rs 1.2 lakh crore.
Options data from Bloomberg now indicates the stock is likely to trade above the 8% range ₹765-835 for the rest of March. This is a sign of increased volatility in the stock.
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“The chairman had every opportunity to bring to the notice of the board any issues contrary to ethics as the head of the board,” Rajesh Baheti, director at Mumbai-based brokerage Crossseas Capital, told Mint. “How can he just make allegations and drive down the share price and walk away?”
Original version of this story Was published on Livemint.com.