HDFC Bank Shares Climb Over 3%; Market Valuation Jumps ₹22,489.75 Cr

Shares of HDFC Bank climbed over 3% on Tuesday as the company send RBI two names for its next MD & CEO.

The bellwether stock edged higher by 3.14% to ₹730.30 on the BSE.

At the NSE, it climbed 3.17% to ₹730.75.

The company's market valuation surged by ₹22,489.75 crore to ₹11,12,672.52 crore.

"A positive for the Indian market is that there is clarity emerging on the choice of HDFC Bank MD and CEO. A quick acceptance of the name of the successor by the RBI can influence the benchmark index significantly," V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

More than a fortnight after incumbent Sashidhar Jagdishan opted out of the race to continue as HDFC Bank's managing director and chief executive, the largest private sector lender on Saturday sent names of two candidates as prospective successors to the Reserve Bank.

HDFC Bank also announced changes to its board, increasing the number of whole-time directors to four from the present three, and also appointing chief credit officer Jimmy Tata as a whole-time director, as per an exchange notification.

Jagdishan opted out of reappointment on August 29, ending a nearly six-month-long suspense on his fate. Its non-executive chairman Atanu Chakraborty's surprise resignation in March, citing issues on values and ethics, was followed by some specific instances showing shortcomings in governance being highlighted.

As per the bank's earlier notification, Jagdishan will retire on October 26, when his term as MD and CEO ends.

The bank has sent names of two candidates in the order of preference and also the remuneration to be paid to each of them, as per the exchange notification.

The Reserve Bank generally approves the selected name to head a lender after going through the list of names and assessing the names under its 'fit and proper' criteria. HDFC Bank has been classified as a systematically important bank.

HDFC Bank said the board approved the two names as per the recommendations of its governance, nomination and remuneration committee on Saturday.

The appointment of the MD and CEO will be for three years, the bank said.