HDFC Bank Ltd.'s stock opened 0.4% higher at Rs 723.05 apiece on the NSE, following CEO Sashidhar Jagdishan's decision to step down from his post and not seek re-appointment.
The stock soared as high as 2.46% to Rs 738 as of 9:20 a.m., as against a 0.42% decline in the Nifty index.
The scrip's reaction has defied expectations that there will be immediate weakness considering this was the second big exit within one year.
However, with the extension overhang for Jagdishan now gone, investors may be betting on a certainty that a new face will drive forward change, according to Kranthi Bathini, Director of Equity Strategy at WealthMills Securities.
"The uncertainty of existing CEO's extension is gone, traders are betting on the new CEO driving profits further and bringing changes," he told NDTV Profit, adding that the stock valuation has become attractive for investors.
The bank is considering Kaizad Bharucha and Jimmy Tata as two internal candidates for the role of the next CEO, as per sources. They added external candidates can also be considered by the bank's NRC & board.
"HDFC Bank may have communicated the 2 internal candidates' names for CEO to the Reserve Bank of India," the sources informed on the condition of anonymity. HDFC Bank did not offer a comment on NDTV Profit's query.
Kaizad Bharucha has been serving on the board of the bank for 12 years and may need special dispensation from the bank regulator for the top job at HDFC Bank. RBI's rules cap a director's position on a bank for a maximum of 15 years.
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CEO's Big Decision
The bank's board fast-tracked the CEO candidature process after current Managing Director and CEO Sashidhar Jagdishan decided not to seek reappointment. Sashidhar will step down from his position on October 26, 2026, the lender informed the exchanges on Aug 29.
"Sashidhar Jagdishan has conveyed today, his decision to not seek his re-appointment as the Managing Director & Chief Executive Officer (MD&CEO) of the Bank," according to an exchange filing on Saturday.
It added that despite persuasion, Jagdishan reiterated his decision to not seek reappointment and accordingly, he will retire from the services of the Bank upon the close of business hours on October 26, 2026.
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