Did HDFC Bank shares really fall 50%? Here’s what actually happened

If you saw HDFC Bank’s share price plummet by more than 50 per cent on Tuesday morning, you weren’t alone in doing a double-take. India’s biggest private lender by market value appeared to have taken a steep fall on the stock market — but here’s the key detail: it wasn’t a real crash.

The sharp drop was the result of a technical adjustment, not a crisis. The bank’s 1:1 bonus share issue came into effect today, and the stock began trading ex-bonus on both the NSE and BSE.

So, What Actually Happened?

On paper, HDFC Bank’s stock tumbled from around Rs 2,600 to Rs 982–986 — a drop of over 62 per cent. But this wasn’t because of bad news, poor performance, or investor panic. It was simply a mathematical correction tied to the bonus issue.

Under this bonus plan, shareholders get one extra share for every share they already own — doubling the total number of shares in circulation. But since the value of the company doesn’t change, the price per share drops accordingly. The net value of your investment? Exactly the same.

So, if you held 100 shares priced at Rs 2,600 each, you now have 200 shares priced at around Rs 1,300 each. Nothing lost — just more shares at a lower price.

Why Issue Bonus Shares?

A bonus share issue is actually a positive sign. It often reflects the company’s confidence in its financial health and long-term growth. It also makes shares more affordable, improves market liquidity, and can attract more retail investors by lowering the entry point.

For HDFC Bank, this move is part of a broader capital strategy to widen its shareholder base and keep the stock price within a more accessible range — all while maintaining investor value.

Who Was Eligible?

The record date for the bonus issue was set as August 26, 2025. Investors needed to hold shares by the end of August 25 (due to India’s T+1 settlement system) to qualify.

What Should Investors Do?

If you’re holding HDFC Bank stock, there’s no action required. Your portfolio will reflect the adjusted number of shares and new price. The total value remains unchanged, and this is a standard practice in capital markets worldwide.