Investors were betting against HDFC Bank Ltd. even before the Iran war and sudden resignation of Chairman Atanu Chakraborty, with open positions in the stock’s active futures contracts at a record high, according to Bloomberg data tracked by Mint.
On 25 February, the number of active futures contracts on the HDFC Bank stock surged to an all-time high of 497,000 versus 24,188 at the expiry of the February series of derivatives a day earlier. The positions rose to 504,000 after the exit of the chairman on Thursday (19 March 2026).
As the rise in open positions has been accompanied by a 12% decline in share price, the buildup is seen as bearish.
“Shorts are likely to have been driven by foreign investors who are the single-largest category of shareholders in the bank…,” Rajesh Palviya, head of research (derivatives and technical) at Axis Securities Ltd., told Mint. He doesn’t expect the HDFC Bank stock to rebound any time soon, as foreign investors continue to offload Indian shares amid an escalating Iran war and surging crude oil prices.
Flight of Foreign Capital
In the first half of March, FII outflows from Indian stocks surged to highest in ~18 months, dragging the Nifty 50 to its worst fortnight since the pandemic rout in March 2020.
Foreign investors have offloaded stocks worth ₹52,704 crore until 18 March, according to data from the National Securities Depository Ltd. Financial stocks, which includes the likes of HDFC Bank, accounted for 60% of the total outflows.
On Thursday, FIIs offloaded equities worth ₹7,558.19 crore, while domestic institutional investors bought stocks worth ₹3,863.96 crore.
A Perfect Storm
The sudden resignation of Chakraborty wiped out ₹69,000 crore from the market cap of HDFC Bank after the share price fell 5.3% to ₹798.20 apiece on Thursday. Shares worth ₹14,340 crore exchanged hands—that was roughly 12% of NSE and BSE’s total traded volume of ₹1.2 lakh crore, according to Bloomberg data.
Options data from Bloomberg now indicates that the stock is likely to trade over an 8% range at ₹765-835 through the rest of March. That’s indicative of a heightened volatility in the stock.
“The chair had every opportunity to bring to the notice of the board, as its head, any issue that conflicted with the ethics,” Rajesh Baheti, director at Mumbai-based brokerage Crosseas Capital, told Mint. “How can he just walk away by making allegations and crashing the share price?”
The original version of this story was published on livemint.com.
