Major brokerage firm Jefferies has sold off its investments in HDFC Bank and reduced its exposure to India in various portfolios following the resignation of the bank’s part-time chairman, Atanu Chakraborty. Jefferies strategist Chris Woods mentioned in a recent report that HDFC Bank was removed from several key equity portfolios without specifying the exact reason for the decision.
In place of HDFC Bank, Jefferies has included HSBC with a 4% weighting in those portfolios, leading to a slight decrease in India’s overall weightage. The brokerage has also made adjustments in its Asia Pacific ex-Japan relative-return portfolio by decreasing exposure to India and Australia while increasing Taiwan’s weight.
Currently, India holds a 13% weight in Jefferies’ Asia Pacific ex-Japan allocation, slightly higher than the MSCI benchmark. The changes come after Atanu Chakraborty resigned as part-time chairman of HDFC Bank, citing differences with the bank over values and ethics, with Keki Mistry appointed as interim part-time chairman.
Analysts have raised concerns about potential impact on investor sentiment due to Chakraborty’s resignation, although no specific misconduct has been alleged. Reports also suggest that the Reserve Bank of India (RBI) may be investigating the circumstances surrounding the chairman’s exit.
Shares of HDFC Bank fell by 3% to Rs 758 on the BSE following the news, with the stock having declined by approximately 14% over the past month.
