CNBC-TV18 reported on Monday, exclusively, citing sources, that the bank has narrowed down its search for Sashidhar Jagdishan’s successor to two candidates – Kaizad M Bharucha, the current deputy Managing Director and wholetime director on the board as the internal candidate, and Anup Bagchi, the current MD & CEO of ICICI Prudential Life as the external candidate.
Sashidhar Jagdishan’s second term as MD & CEO ends next month and he informed the board recently that he does not wish to seek reappointment, even after the board persuaded him to reconsider his decision.
HDFC Bank’s US-listed shares (ADRs) were up 6% last Friday, before declining up to 1% on Monday. Indian equity markets were closed on Monday on account of Ganesh Chaturthi.
Bharucha has been part of HDFC Bank since 1995 and has been on the bank’s board since 2014, which might prove to be a regulatory hurdle in case of his appointment. According to RBI rules, the aggregate tenure of a whole-time director including an MD & CEO in a private bank is only 15 years, which means, Bharucha, in case picked, would only be able to serve at the top until 2029.
Bagchi is an ICICI Group veteran and has held various roles across the group over the last few years, across retail, MSME and corporate banking, along with his current role in the insurance sector.
HDFC Bank’s next MD & CEO will be subject to regulatory approval by the Reserve Bank of India.
According to brokerage firm Jefferies, clarity on smooth succession will not only be positive for HDFC Bank, but for the sector as a whole.HDFC Bank shares are currently trading at 1.5 times their financial year 2027 estimated price-to-book, which is 30% below ICICI Bank’s valuations, 15% below Kotak, at par with Axis Bank, and at a 15% premium to State Bank of India.
“In fact, weakness in HDFC Bank has been a drag on performance of other banks as well. Hence, we feel that clarity here and improved business momentum may aid broader re-rating as well,” the brokerage wrote in its note.
Jefferies maintained its “buy” rating on HDFC Bank with its price target of ₹880, indicating an upside potential of 24% from current levels.
Shares of HDFC Bank ended 2.1% higher on Friday at ₹708.5. The stock is still down nearly 28% so far this year.
