The HDFC Bank stock has seen a steep fall from Rs 1,069.80 levels at the close of March 13 close. The counter is trading at Rs 772 per share, down Rs 110.85 or 12.56 percent, on the NSE at 12:05 pm.
Despite the fall, Aditya Puri, Managing Director, HDFC Bank, allayed investor concerns saying the virus needs to be controlled first. “We are happy that the government announced a lockdown. Investors should concern ourselves with respect to the impact of coronavirus on the economy, not just financial markets. They have to understand that the world is not coming to an end. If companies will survive, the banking sector will survive,” Puri told CNBC-TV18.
He explained that bottom of the pyramid businesses and SMEs are not highly leveraged and that rural India was functioning well
As for investor concerns over the coronavirus impact on the bank’s financials, Puri said Q4 FY20 will not be flat and “you will be surprised with our numbers.”
Wading into the debate on whether the Monetary Policy Committee (MPC) should cut rates to stem the economic slowdown, he said there is need for a ‘non-scheduled rate cut’ as companies are facing a cash flow problem and not ‘going bust’. “The Reserve Bank has to give forbearance for the cash flow problem that the (corona)virus will create,” he said.
Puri added that the Narendra Modi-led government ‘needs to spend like hell’ to boost health facilities and to create jobs.
To those fretting about the selloff in Indian equities, he said the recovery will be equally strong as even now ‘half the sales are happening via computers’.
Last week, the HDFC Bank ADR saw a sharp selloff. Puri attributed this to ‘programme selling’. He ruled out the probability of real investors being involved, saying he personally spoke with a number of big active investors and they ‘are not selling in any big way’.To catch all live updates on the coronavirus pandemic, click here…