HDFC Bank dives 5%: These mutual fund schemes have the highest exposure to the stock

Several mutual fund schemes with the high exposure to HDFC Bank can come under pressure after the stock crashed over 8 percent on March 19 morning following the resignation of part-time chairman Atanu Chakraborty.

Chakraborty quit India’s biggest private lender citing differences over “personal values and ethics. The HDFC Bank stock reacted sharply to the surprise exit. At noon, the stock was trading at Rs 810 on the National Stock Exchange, down almost 4 percent from the previous close, paring some of the morning losses.

The sell-off extends beyond the individual stock. ACE MF data reveals that several index funds and exchange-traded funds have a high concentration in HDFC Bank.

Baroda BNP Paribas NIFTY Bank ETF has the highest exposure at 19.83 percent. It is followed closely by Axis Nifty Bank Index Fund and Axis NIFTY Bank ETF, both with over 19.7 percent exposure. A number of other Nifty Bank ETFs and index funds also hold the stock in the 19.6-19.7 percent range.

Several actively managed mutual fund schemes could also face pressure due to their high exposure to HDFC Bank. ACE MF data shows funds such as Mirae Asset ELSS Tax Saver Fund (9.71 percent), Mirae Asset Large Cap Fund (9.54 percent), and Quant Business Cycle Fund (9.50 percent) have among the highest allocations to the stock, with many others in the 9-9.4 percent range.

While high HDFC Bank weightage is expected in banking-themed funds and ETFs, diversified active funds may also face a short-term volatility. As these funds aren’t tied to a single sector, their performance is more sensitive to stock-specific movements.

Given this heavy weighting, any sharp movement in HDFC Bank shares tends to directly affect the performance of these schemes, especially in the short term. A sustained decline in the stock can weigh on returns.

Tthe bank’s management has sought to reassure stakeholders. HDFC Bank chief financial officer Srinivasan Vaidyanathan said the leadership team remains closely aligned with interim chairman Keki Mistry and the board, describing the relationship as one marked by strong camaraderie and cohesiveness. “We believe this will be extremely positive for our front-end engagement with the bank,” he said, adding technology will increasingly act as a key differentiator, with more visible progress expected over the next one to two years.

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