CEO's Shock Exit Sends This Lender's Share Price Deep Into Red, Analysts Cut Target Price

Shares of Bandhan Bank were down sharply on Monday after CEO Chandra Shekhar Ghosh said he would step down at the end of his current tenure, leading to brokerage downgrades.

What Happened: Bandhan Bank Ltd received a rating downgrade from brokerage Jefferies, shifting from “buy” to “underperform” status. This change followed the announcement on April 5 that Managing Director & CEO Chandra Shekhar Ghosh would resign when his tenure ends in early July.

Jefferies also revised the target price of the stock down to ₹170 from ₹290 due to Ghosh’s unexpected departure. This adjustment suggests a 14% decline from the bank’s closing price of ₹197.40 on April 5.

In an interview with Moneycontrol, Ghosh clarified that his decision to step down was voluntary. The bank has initiated the search for a new CEO, emphasising that Ghosh’s retirement has been under consideration for almost a year.

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Jefferies expressed concerns about the potential impact of the leadership transition on the bank’s growth trajectory and credit costs. The brokerage stressed the importance of a seamless succession process, especially given the relative newness of most senior management members.

Shock Exit: Ghosh, with over 30 years of experience in microfinance and development, is set to retire on July 9. The board had previously approved his reappointment as manging director and CEO for three years on November 24.

In his resignation letter filed with regulatory authorities, Ghosh mentioned his intention to assume a broader strategic role within the Bandhan group after leading the bank for nearly a decade.

Price Action: Bandhan Bank’s share price was down 6.23% at ₹185.05 in morning trade on Monday.

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