HDB Financial clarifies reasons behind Arijit Basu's exit; stock remains below IPO price

Shares of HDB Financial Services Ltd. are trading over 1% lower after Arijit Basu resigned as Non-Executive Independent Director and Chairman of the company on January 23, with immediate effect.

Basu, in his resignation letter, said that he was recently approached to be considered for the role of Non-Executive Director and Chairman at an Indian bank.

Given that his tenure at HDB Financial Services was nearing completion, he had conveyed his willingness to be considered for the new role.

With the bank having received regulatory approvals and the appointment process underway, Basu said he decided to step down from HDB's board to avoid any potential conflict of interest.

Speaking to CNBC-TV18, the company's management said Basu's term was coming to an end and he was exploring future opportunities, having now found one at an Indian bank.

The resignation, they said, was submitted purely from a governance standpoint to pre-empt conflicts, adding that the company continues to share a strong relationship with Basu.

Management said the process to appoint a new Non-Executive Director is underway and said that the board currently has six independent directors, ensuring smooth functioning going ahead.

On the business environment, the company said industry-level stress seen over the past few quarters is receding, with growth momentum and asset quality showing improvement.

It added that the fourth quarter is typically strong for both the company and the industry, and the focus remains on maintaining growth while preserving asset quality.

The HDB Financial Services stock continues to trade 4% below its IPO price of ₹740 apiece.