Market News
HDFC Bank falls over 15% in March: Key factors why the banking giant is crucial for the stock market and mutual funds
5 min read | Updated on March 23, 2026, 15:11 IST
SUMMARY
HDFC Bank shares have tumbled over 15% this month after its part-time chairman, Atanu Chakraborty, abruptly resigned from his position. The sharp fall in HDFC Bank shares has impacted the broader markets as the stock has high weightage in the NIFTY50 and NIFTY Bank index. Mutual funds and FIIS also have substantial exposure to the stock.
Stock list
Foreign institutional investors (FIIs) hold a massive 47.7% stake in HDFC Bank as of December 2025.
HDFC Bank shares saw a sharp decline for the third straight day on Monday, March 23. The stock has now plunged over 15% this month after multiple back-to-back events impacting the lender's share price.
Last week, HDFC Bank non-executive chairman Atanu Chakraborty abruptly resigned from his position on March 18, citing differences over “values and ethics”. Keki Mistry, a veteran of the HDFC Bank Group, was appointed as the interim chairman following the resignation, with approval from the Reserve Bank of India. Following this, HDFC Bank shares tumbled 5.3% on March 19, while the NIFTY50 index declined 3.26% on the same day.
HDFC Bank has reportedly terminated three senior executives for their alleged involvement in the mis-selling of Credit Suisse’s Additional Tier 1 Bonds, as per media reports. As a result, the stock declined over 4% today to hit a 52-week low of ₹745.7 apiece. In line with the HDFC Bank stock fall, the NIFTY50 index is also down nearly 600 points to trade around 22,550. Market capitalisation of HDFC Bank has been wiped out by nearly ₹1.35 lakh crore to ₹11.48 lakh crore in the last four sessions.
| Date | HDFC Bank fall | NIFTY fall | NIFTY Bank fall |
|---|---|---|---|
| March 19 | ▼5.32% | ▼ 3.26% | ▼ 3.39% |
| March 20 | ▼2.22% | +0.4% | ▼ 0.04% |
| March 23* | ▼ 4.1% | ▼ 2.3% | ▼ 3.4% |
In the last few trading sessions, a substantial fall in the HDFC Bank has coincided with the fall in broader markets. This shows the importance of how crucial HDFC Bank stock is to the Indian stock market, banking industry and overall economy.
High NIFTY50 and Bank NIFTY weightage
HDFC Bank has one of the highest weightages in the NIFTY50 and NIFTY Bank index. Based on the free float market capitalisation, HDFC Bank has 11.83% weightage in the NIFTY50 index, while it has 19.69% weightage in the NIFTY Bank index.
As a result, any substantial move in the HDFC Bank shares has an impact on the NIFTY50 and NIFTY Bank index. As per the calculation, a 1% fall in the HDFC Bank shares drags the NIFTY50 index roughly by 22 to 25 points.
In the last few trading sessions, HDFC Bank shares have declined by over 15%, which could have resulted between 330 to 375 point fall in the benchmark NIFTY50 index.
In the case of NIFTY Bank, HDFC Bank has nearly one-fifth weight. Hence, a a 1% fall in the stock pulls the index down by about 0.2% on its own, equivalent to 100 to 105 points. This 15% fall in HDFC Bank has dragged the NIFTY Bank index by 1,500 to 1,575 points.
However, the real-world index movement may differ because other stocks also rise or fall at the same time.
Substantial Mutual Fund holdings
HDFC Bank is one of the most widely held stocks among Indian mutual funds. More than 740 schemes own the stock, and many have over 5% exposure to the stock. Mutual funds have around 26.6% holdings in the HDFC Bank as of December 2025. Hence, the substantial fall in the stock price in recent weeks has eroded the NAVs of large-cap and flexi-cap schemes.
Index and thematic banking funds must have faced the maximum impact of the HDFC Bank stock fall due to the mandated weightage of the stock in their portfolios.
| Fund Name | Exposure* |
|---|---|
| Parag Parikh Large Cap | 9.77% |
| Mirae Asset Large Cap | 9.54% |
| WOC Large Cap | 9.40% |
| DSP Large Cap | 9.38% |
| Tata Large & Mid Cap | 9.38% |
| UTI Large Cap | 9.37% |
| Quant Large & Mid Cap | 9.21% |
| Bandhan Flexi Cap | 9.02% |
| Taurus Flexi Cap | 8.64% |
| Franklin India Flexi Cap | 8.46% |
| Parag Parikh Flexi Cap | 7.73% |
| Canara Robeco Flexi Cap | 7.60% |
| Mirae Asset Large & Mid Cap | 6.75% |
| DSP Large & Mid Cap | 6.57% |
| Kotak Large & Mid Cap | 5.64% |
Investors holding these mutual funds may see some short-term impact on their portfolio's Net Asset Value (NAV) due to the stock price decline. However, this short-term volatility is not a permanent loss, and if there is a recovery in the market, then the NAV of the fund will also improve. Also, mutual funds are inherently diversified, which helps mitigate the risk of a single stock underperforming over the long term.
Most FIIs hold HDFC Bank shares
Foreign institutional investors (FIIs) hold a massive 47.7% stake in HDFC Bank as of December 2025. Hence, the sharp decline in HDFC Bank shares has significantly impacted the FIIs, who have been net sellers of Indian equities since July 2025. So far in March 2026, FIIs have sold Indian equities worth ₹86,780 crore. This downturn in the HDFC Bank could have caused significant notional losses for major foreign investors.
Investors should watch out for the HDFC Bank shareholding pattern of the fourth quarter of FY26, which will be released after the March 31 quarter, for more insights on mutual fund and FIIs holdings.
About The Author
Next Story
