HDFC Bank slips to 2-1/2-year low as legal, leadership woes linger

Business Recorder reported that HDFC Bank, India's top private lender, slid for a third consecutive session on Thursday and pulled down the benchmark index. At one point the stock dropped as much as 2.37 per cent, reaching a level not seen for two and a half years. By the close, the shares had lost $2.6 billion in market value.

The shares are heading for their biggest annual decline since 2008 and are already down more than a quarter this year. Fident Asset Management's founder described the case as a near-term overhang on the stock. The suit accuses the bank and two executives of illegal payments worth 450 million rupees to a Maharashtra road development body to attract large deposits. The bank says the suit is without merit and intends to defend itself vigorously.

Leadership questions add to the pressure, since CEO Sashidhar Jagdishan's term ends on October 26 and the bank has not commented on his reappointment. Mint reported, citing investors, that more than 75 clients of a Luxembourg fund bought through the Dubai operations plan to approach regulators over alleged mis-selling and delayed redemptions. Macquarie said a short-term extension would keep succession worries alive, whereas a three-year renewal would lift one of the main doubts.