InvestorQ : Do you see the exit of Aditya Puri making a big difference to the performance and valuation of HDFC Bank?
Crowny Pinto made post

Do you see the exit of Aditya Puri making a big difference to the performance and valuation of HDFC Bank?

Answer
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1 month ago


To an extent it must be said that the uncertainty over the future CEO of HDFC Bank has ended. During the week, RBI approved the candidature of Sasidhar Jagdishan for the post of next CEO of HDFC Bank. It may be recollected that Aditya Puri demits office on 26 October and Jagdishan will take over on 27 October. Despite the established credentials and processes at HDFC Bank, this will be big shoes to fill.

For 26 years, Puri has been synonymous with HDFC Bank. However, his leadership has never been about the number of years he was CEO but about the impact. Between 1994 and 2020, Puri built HDFC Bank into India’s largest private bank overtaking ICICI Bank a few years back. But the real value is in the market cap, which is more than combined market cap of all PSU banks jointly.

But what is truly amazing is that Aditya Puri managed to grow the bank profitably while keeping the gross NPAs under a tight leash. Even today, after all pandemic, the gross NPAs are just a little over 1%. Puri has also created a credit evaluation culture that is among the best in the industry. Of course, Jagdishan is an insider for 25 years and has worked closely with Puri. But, this will certainly be big shoes to fill.