Investors of HDFC Bank woke up to a scare on Tuesday as the stock price appeared to crash by 50%. But there’s no cause for panic as nothing has gone wrong with India’s largest private sector lender. The sharp fall was purely optical, caused by the share price adjusting after the bank’s first-ever 1:1 bonus issue.

On Monday, HDFC Bank shares closed at ₹1,964.50 on the BSE. As trading opened today, the stock price automatically halved in line with the bonus adjustment, while investors’ shareholding doubled. This made it look like the stock had tanked, but in reality, the overall value of investors’ holdings remains the same.

For example, if an investor held 100 shares at ₹1,500 each before the bonus issue, they would now hold 200 shares priced at around ₹750 each, leaving the total investment value unchanged.

At the time of reporting, HDFC Bank shares were trading 0.75% lower at ₹975 on the BSE, with a market capitalisation of ₹14.97 lakh crore. The banking heavyweight opened at ₹982.20 and seemed to tumble by 50%. However, the fall isn’t real - it was only due to price adjustments.

HDFC Bank had announced its maiden bonus issue last month, in the ratio of 1:1 (one free share for every one held), its first since listing in 1995. The stock turned ex-bonus on August 26, with August 27 set as the record date.

For the first quarter of FY26, HDFC Bank posted a 12.2% year-on-year rise in standalone net profit at ₹18,160 crore, supported by healthy non-interest income, even as core margins remained under pressure. The bank’s net interest income (NII) grew modestly by 5.4% to ₹31,440 crore, while its net interest margin (NIM) slipped sequentially to 3.35% from 3.46% in Q4 FY25, reflecting the lag in deposit repricing amid a high-rate environment.

For Q1 FY26, non-interest income rose to ₹21,730 crore, driven by transaction gains of ₹9,130 crore, fee and commission income of ₹7,590 crore, forex and derivatives revenue of ₹1,630 crore, and miscellaneous income of ₹2,400 crore.

Last week, S&P Global Ratings upgraded credit rating and outlook to BBB/Stable/A-2 from BBB-/Positive/A-3, following a similar action on India’s sovereign rating.

“The stable rating outlook on HDFC Bank reflects that on the sovereign. We expect HDFC Bank to maintain its solid market position, strong capitalization, and low credit costs over the next two years,” it said.

“The outlook also reflects our view that HDFC Bank's strong management and governance structure will continue to underpin its above-average financial performance over the next two years,” the brokerage added.

The foreign brokerage expects HDFC Bank’s risk-adjusted capital (RAC) ratio to remain between 13.5% and 14.5% over the next two years, supported by lower risk weights due to India’s improved economic environment.

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)