According to CNBC TV18 reports, HDFC Bank leads mutual fund exposure at 9.58% among the three major private banks as of July 31, 2026. The bank has experienced a 30% year-to-date decline, significantly underperforming the broader market. ICICI Bank follows with 9.12% exposure and has delivered a 6.4% gain year-to-date, while Axis Bank shows 8.40% exposure with a 0.66% decline year-to-date. The data reveals varying fund strategies across different private sector banks, with HDFC Bank's underperformance contrasting sharply with its dominant mutual fund allocation position.
As reported by CNBC TV18, DSP Large Cap Fund leads with 9.58% exposure to HDFC Bank, followed by Nippon India Large Cap Fund at 9.12% and Motilal Oswal Large Cap Fund at 9.06%. Mirae Asset Large Cap Fund holds 8.91% exposure, while UTI Large Cap Fund maintains 8.87% and HSBC Large Cap Fund has 8.54%. DSP Flexi Cap Fund and Axis Large Cap Fund both allocate 8.40% each to HDFC Bank, with Parag Parikh Large Cap Fund holding 8.31% exposure.
According to IIFL Capital Services reports, HDFC Bank's Q1 FY27 standalone net profit increased around 5% YoY to ₹19,060 crore, while NII rose 6.7% YoY to ₹33,535 crore. However, NIM declined to 3.26% from 3.38% in Q4 FY26, recording its lowest level reported at that point. The bank's advances grew 15.4% YoY to ₹30.61 lakh crore, but advances under management grew to 12.4%, creating challenges in deposit mobilisation. Despite healthy loan growth numbers, investors have been comparing HDFC Bank with faster-growing peers such as ICICI Bank, contributing to concerns about the perceived gap in loan growth, margins and return on assets.
The bank faces significant governance challenges following the resignation of former part-time chairman Atanu Chakraborty, who cited ethical differences. Subsequently, the bank's internal review of the MSRDC deposit matter concluded that the conduct of three senior executives, including the CEO, amounted to 'business overreach'. The executives were issued warnings and fined ₹1 lakh each, though no conclusive evidence of personal enrichment was found. In August, reports of a US securities class-action lawsuit against HDFC Bank and two senior executives led to another wave of selling, with allegations relating to the MSRDC deposit matter and alleged misleading disclosures. The biggest overhang emerged on August 29 when CEO Sashidhar Jagdishan decided not to seek reappointment as MD & CEO, with his tenure ending on October 26, 2026. The bank's internal review of the MSRDC matter classified the conduct as 'business overreach' rather than fraud or personal misconduct.
According to NDTV Profit reports, HDFC Bank shares have eroded over ₹4 lakh crore in market capitalisation this year, with the stock declining more than 28% year-to-date compared to a 3.3% fall in Bank Nifty and an 8.4% decline in Nifty 50. The stock is now around 31.5% below its 52-week high of ₹1,020.35, recorded in October 2025. Trading activity remained strong with around 444.17 lakh shares changing hands, while the traded value stood at approximately ₹3,144.20 crore. HDFC Bank currently has a market capitalisation of approximately ₹10.97 lakh crore. However, analysts view the current decline as a discounted franchise waiting for its next chapter, with the stock trading at a significant discount to historical averages at a current price-to-book ratio of 1.78x compared to a five-year average of 2.90x. HDFC Bank stock is trading at roughly 1.3–1.6x FY28 adjusted book value, well below its historical premium, offering potential opportunities for long-term investors who can tolerate 6–12 months of volatility around the leadership transition.
