Shares of HDFC Bank rose nearly 3 per cent after the Reserve Bank of India (RBI) lifted restrictions on its business-generating activities planned under the bank’s Digital 2.0 program.
HDFC Bank stock touched an intraday high of Rs 1,433.75 , rising 2.63 per cent against the previous close of Rs 1,397 on BSE. It has gained 7 per cent in five sessions.
The share opened 1 per cent higher at Rs 1,411 on BSE.
HDFC Bank share is trading higher than 5 day moving averages but lower than 20 day, 50 day, 100 day and 200 day moving averages.
The private lender’s stock has lost 7.97 per cent in one year and fallen 3.5 per cent since the beginning of this year.
Total 1.24 lakh shares of the lender changed hands amounting to turnover of Rs 17.72 crore on BSE. Market cap of the bank rose to Rs 7.85 lakh crore on BSE.
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The large cap share hit its 52-week high of Rs 1724.30 on October 18, 2021 and 52-week low of Rs 1292 on March 8, 2022. “…we wish to inform you that the RBI vide its letter dated March 11, 2022 has lifted the restrictions on the business generating activities planned under the Bank’s Digital 2.0 program. The members of the Board of Directors have taken note of said RBI letter,” HDFC Bank said in an exchange filing.
The lender said it was fully committed to ensuring continued adherence to the highest standards of compliance with RBI recommendations. “We would like to extend our gratitude to the regulator for this action,” it said.
The bank said it had utilised this time of restrictions to draw up short, medium, and long-term plans to meet the evolving digital requirements of its customers and it will roll out these initiatives in the days to come.
“We are happy that we will once again be able to offer our customers our full suite of best-in-class services and continue to serve them with dedication and humility,” the bank said.
Here’s a look at what brokerages said on the prospects of the stock after removal of ban.
Morgan Stanley has an overweight stance on the lender with a target price of Rs 2,050 The bank has been working on new digital initiatives aside from the ban. It expects to roll them out over next few quarters.This, coupled with the RBI move, should help reduce investor concerns around bank’s digital capabilities.
Japanese brokerage Nomura has given a buy call with a target price of Rs 1955. After the removal of ban, focus to shift to NII and loan growth. With this, the brokerage expects negative sentiment from a supervisory oversight ought to finally dissipate.
Jefferies has assigned a buy call with a target price of Rs 2,160 on the stock. RBI has lifted restrictions put on bank’s new digital initiatives which would help push launch of new platforms such as Payments-Hub, Customer-Experience Hub, Neo-bank vertical & ecosystem platforms. Key overhang is behind now.