HDFC Bank share price, the largest banking stock, dropped by nearly 51% on BSE and NSE on August 26, 2025. This is because HDFC Bank has turned ex-bonus for the first time for its bonus shares ratio 1:1. There is no need to panic over HDFC Bank's sharp fall; the stock is just adjusting to its bonus issue, which is a common notion!
HDFC Bank Share Price:
At the time of writing, HDFC Bank share price traded at Rs 970.40 apiece on NSE, with market cap of Rs 14,88,342.72 crore. This is down by nearly 51% from the share price level of Rs 1,964.60 apiece on August 25.
HDFC Bank Bonus Issue:
The heavyweight stock turned ex-bonus on August 26, for its bonus issue ratio of 1:1. This means that HDFC Bank will reward 1 free share as bonus to eligible investors on their every 1 existing share with a face value of Re 1.
August 26 is also the record date to determine eligible shareholders for the bonus.
For this, the lender will allot at least 766,79,13,646 equity shares as bonus, amounting to Rs. 766,79,13,646/-. This
amount will be taken out from HDFC Bank's free reserves.
What are the impact of bonus issues?
Bonus issues impacts a listing company in the following manner:
- Increases the number of outstanding equity shares
- Reduces share price in proportion to the number of bonus shares issued.
- Reduces free reserves and surplus of the company.
- Creates implicit value per equity share.
- Increases liquidity in the equity shares on the stock exchanges.
- Reduces per share ratios such as earnings per share, or book value per share, among others.
Calculate HDFC Bank Bonus Issue:
Let's say you held 100 shares of HDFC Bank at Rs 2,000 each. Assuming no market reaction on the bonus record date, at a 1:1 bonus issue ratio, you will receive 100 free shares (100 existing shares x 1/1), which will take your total number of shares to 200 shares, but the share price value will be reduced to Rs 1,000 each. So theoretically, there is no surge or fall in your portfolio; your wealth remains the same.
Furthermore, the earnings per share will decline due to bonus issue adjustments. Example: If the company earned Rs 200 crore and holds 200 shares pre-bonus, its earnings per share will be Rs 1. Assuming profits are unchanged, post bonus issue, at a 1:1 ratio, the company will have 400 shares, but its EPS will be Rs 0.5. Hence, no increase in wealth.
Should You BUY HDFC Bank Shares?
The consensus recommendation from 39 analysts for HDFC Bank Ltd. is STRONG BUY, as per Trendlyne data. Of the total, 29 analysts have recommended STRONG BUY, while 8 analysts suggested BUY, and only 2 analysts have recommended HOLD. No analyst suggested SELL. The average target price is Rs 2279.85 apiece on HDFC Bank, signalling multi-fold surge ahead.
Recently, Global brokerage Jefferies has suggested BUY with target price of Rs 2,400 on HDFC Bank. The positive outlook is due to HDFC Bank's robust deposit mobilisation, better loan-to-deposit ratio (LDR) targets, while merger-related synergies look well-poised.
According to Jefferies, HDFC Bank's asset quality remains stable, indicating a focus on better quality retail and SME loans, which it believes, would support the bank's lending appetite. Jefferies is expecting credit growth to improve to 11% in FY26 in HDFC from 5% growth in FY25.
Disclaimer: The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.
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