Now Reading: HDFC Bank drags Nifty 915 pts, 59 mutual funds with Rs 4.1 lakh crore hit
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HDFC Bank drags Nifty 915 pts, 59 mutual funds with Rs 4.1 lakh crore hit
HDFC Bank drags Nifty 915 pts, 59 mutual funds with Rs 4.1 lakh crore hit
HDFC Bank has pulled the Nifty down by 915 points this year alone, making it the single biggest drag on the index. As many as 59 mutual funds holding a combined Rs…
HDFC Bank has pulled the Nifty down by 915 points this year alone, making it the single biggest drag on the index. As many as 59 mutual funds holding a combined Rs 4.1 lakh crore in the bank's stock are feeling the impact.
The bank's underperformance stems from its weight in benchmark indices and the market's response to its post-merger balance sheet management. The stock's slide has directly reduced returns for a wide range of equity mutual fund schemes, including several that are household names among Indian retail investors.
The pain is concentrated: HDFC Bank's weighting means even diversified funds cannot avoid the hit. Investors should check their fund's portfolio for HDFC Bank exposure to understand how much of their return is being affected by this single stock.
Indian Opinion Analysis
HDFC Bank's weighting in benchmarks means its underperformance drags down all passive and many active funds that track the Nifty. The bank's overhang stems from the RBI's 2018 circular on large borrower limits, which forced the bank to slow loan growth, and the market's impatience with its high provisions ratio. The result is that investors who thought they owned diversified equity funds are effectively taking an outsourced HDFC Bank bet. The real test comes when the bank's merger-related cost synergies materialise, expected by mid-2026. Watch HDFC Bank's quarterly net interest margin and loan growth numbers for signs of a turnaround.
Source: ndtvprofit.com
This story was synthesised by AI from the source linked above.
