Anup Bagchi's exit from ICICI and entry into HDFC Bank has flipped the private‑banking hierarchy overnight. The move, announced on April 12, has removed the perceived stability that ICICI offered to risk‑averse investors, prompting a rally in HDFC's equity as traders bet on a new growth engine.
HDFC Bank now trades at a 1.6‑times price‑to‑book, the lowest among its peers, while Kotak Mahindra sits at 2.2x and ICICI Bank at 2.5x. The valuation dip follows a sharp 2.1% drop in HDFC's book value per share last month, making the 1.6x figure appear attractive to value‑seekers.
GreenEdge Wealth’s Digant Haria noted that the bank’s deposit growth had been lagging due to post‑merger integration, but the new leadership is expected to reverse that trend. Bagchi, who built ICICI’s retail framework in 2010, is seen as the catalyst for a 15% deposit uptick over the next fiscal year, according to Haria.
The stock is poised for a short‑term 2‑4% lift, but foreign institutional selling linked to global macro pressures could dampen momentum. Market watchers anticipate a steadier rally once those external forces ease, potentially delivering a 3% annualized return over the next two years.
Sector‑wide, private banks average a 2.8x price‑to‑book, positioning HDFC’s 1.6x valuation as a bargain that may attract contrarian investors. Analysts are now revising their top‑tier pick list to favor HDFC over ICICI, citing stronger balance‑sheet fundamentals and an aggressive deposit strategy.