HDFC Bank shares adjust to bonus issue: Did the stock actually plunge 50% in one day?

HDFC Bank bonus issue

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The shares of HDFC Bank closed at around Rs 972 apiece on August 26, which is around 50 percent lower than the previous closing price of Rs 1,964 apiece. This comes as the shares of India's largest private lender adjusted to a 1:1 bonus issue.

HDFC Bank on July 19 had announced its first ever bonus issue of shares in the ratio of 1:1. The Mumbai-based private lender set August 27 (tomorrow) as the record date to determine the eligibility of the shareholders set to receive the bonus shares.

Eligible shareholders will receive one bonus share for every single share of the company they own, as on record date. As stock markets will remain closed tomorrow on account of Ganesh Chaturthi, the stock adjustment may have taken effect today.

While the issue of bonus shares increases the total number of shares issued and owned, it does not change the market capitalization of the company. This increases the overall liquidity of the stock. That is why, the price of HDFC Bank shares appears to have halved after the adjustment.

Bonus issue essentially are free shares offered by a company from its reserves. Such issue is perceived to reflect on a firm's strong financials and growth potential.

In actual terms, HDFC Bank shares dropped nearly 1 percent on August 26. The stock currently has a P/E ratio of over 41.

Along with the bonus issue, the private lender had also announced a special interim dividend of Rs 5 per share, in its results for the first quarter of financial year 2026.

HDFC Bank, on July 19, reported a decline in consolidated net profit to Rs 16,258 crore in Q1 FY26, down from Rs 16,475 crore a year ago, despite a one-time pre-tax gain of Rs 9,128 crore from the IPO of its subsidiary, HDB Financial Services. The bank's standalone net interest income (NII) expanded 5.4 percent to Rs 31,438 crore in Q1 FY26.

The subdued bottom-line performance came as the bank made total provisions of Rs 14,442 crore, including Rs 9,000 crore in floating provisions and Rs 1,700 crore in contingent buffers, indicating caution over potential asset quality pressure.

Also read: LIVE blog on stock market updates