HDFC Bank Receives Warning Letter from Sebi
Sebi’s Warning
HDFC Bank recently received an administrative warning from Sebi for not following certain rules set by the regulator. This is the second warning letter the bank has received in less than a week.
Previous Warning
Earlier, the latter had sent a warning letter to the Bank regarding some issues found during an inspection of the bank’s investment banking activities.
Current Warning
This time, the warning letter is about the delayed disclosure of the resignation of a senior employee, Arvind Kapil. SEBI said that the bank also failed to explain the reason for the delay in disclosing Kapil’s resignation. They are taking this violation seriously and has warned the bank to be more careful in the future.
Regulator’s Advice
Sebi has advised the Bank to take corrective actions, present this warning to the Board, and inform the stock exchanges. Despite these warnings, HDFC Bank’s shares have been performing well in the last six months, with an 18% increase in value.
Analysts’ Views
Analysts believe that HDFC Bank’s balance sheet has become stronger after a merger and is set for steady growth. Out of 40 brokerages covering the stock, none have a sell rating, and 28 analysts consider it a strong buy.
Market Trends
Foreign Institutional Investors (FIIs) have been buying the Bank shares, with a significant amount spent on the financial services sector in November. The bank’s index weightage increased due to MSCI’s rebalancing, attracting around $1.88 billion in passive inflows.