The timing of the sale of Aditya Puri’s HDFC Bank shares has come at a time when the Reserve Bank of India’s (RBI) financial stability report has flagged off bad loan woes for the sector amid persisting uncertainty from the coronavirus pandemic and macro-economic stress. The RBI report says GNPA ratios of banks could rise to 12.5 percent by March 2021 from the 8.5 percent recorded in March 2020.

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Sharing his views and outlook, Macquarie Capital Securities’ banking analyst Suresh Ganapathy said, “One can definitely question the timing of (Aditya Puri’s) exit. A lot of people have argued that why can’t he sell after the moratorium period expires but we believe that a part of the selling could be attributed to the requirement for funds for the ESOPs. We have double-checked on this matter. Last time also the part of the selling was done for funding the ESOPs. Having said that, the guy who has built in Rs 6 trillion of marketcap definitely deserves a couple of $100 million. Even Jeff Bezos of Amazon keeps selling shares time and again. So I don’t think there is too much negative for HDFC Bank from this particular aspect.”

Speaking about retail delinquencies, Ganapathy added, “There have been concerns about possible retail delinquencies considering the fact that there are worries about job-losses and therefore what could be the impact on unsecured loans, they have managed very well substantial proportion of selling of these loans has happened to internal customers. I am more worried about the fact that if this indeed is true and HDFC Bank is indeed going to face the problem, six months down the line there will be complete mayhem in financials. All other banks are going to suffer even more because this is one of the best banks that we are talking about. So the implications are far wider for the system than for the HDFC Bank alone.”

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