Bank Nifty Slips as HDFC Bank Falls; ICICI Moves and SFB Reforms in Focus

In Bank Nifty is a stock market index that tracks the performance of the 12 largest and most liquid banking stocks in India. On January 5, 2025, the index initially hit a record high of 60,437.35, but came under pressure in subsequent weeks due to global concerns and profit-booking. 

At 11:40 AM, Bank Nifty was trading at 58,923.85 and was down by 327.70 points. Here is a look at the latest developments in key stocks of NIFTY Bank. 

HDFC Bank Drags Sentiment After Sharp Weekly Fall

HDFC Bank share price recorded have their worst weekly performance since January 2024. In the past week, they declined for 5 consecutive sessions and ended the week with a 6.5% loss. The stock hit a low of ₹935.90, eroding over ₹1 lakh crore in market capitalisation during the week ending January 9.

Investor concerns were largely linked to the bank’s elevated loan-to-deposit ratio, which has raised questions around liquidity management and near-term growth visibility. Given HDFC Bank’s heavy weight in the Bank Nifty index, the sharp correction significantly weighed on overall index performance.

ICICI Group Increases Stake in 6 Companies 

During Q3 FY26, the ICICI Group increased its equity stakes in six listed companies, with the total value of investments crossing ₹2,500 crore. The largest investment was made in AWL Agri Business, followed by Gujarat Narmada Valley Fertilisers, CAMS, Techno Electric, and KNR Constructions. 

This strategy also shows that large financial institutions are looking beyond traditional lending to participate in growth areas of the economy. As these sectors expand, banks are likely to benefit indirectly through increased loan demand, better asset quality, and stronger business activity.

Small Finance Banks Tighten Risk Controls

Asset quality concerns in the microfinance segment have prompted small finance banks to overhaul their risk strategies. Around 22% of unsecured microfinance portfolios across the sector had turned bad as of March last year, forcing banks to reduce unsecured exposure.

Banks such as ESAF, Suryoday, Ujjivan, and Utkarsh are actively shifting towards secured lending, including gold loans, mortgages, and vehicle loans. Many are also expanding credit guarantee coverage under government-backed schemes to stabilise asset quality.

Regulatory support, including the RBI’s reduction of priority sector lending requirements, has further enabled these banks to diversify their loan books, easing pressure on profitability and balance sheets.

Read more: DMart Share Price Rises 2%; Q3 FY26 Results: Revenue Rises 13% YoY.

Conclusion

Overall, Bank Nifty stocks are navigating a phase of stock-specific stress and sector-level adjustments. While pressure on large private banks like HDFC Bank has dampened near-term sentiment, institutional investment trends and proactive risk management by smaller banks point towards structural resilience in the banking sector. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.