HDFC Bank shares drop 1.44% as three US law firms launch securities probe
Synopsis
Three US law firms have launched separate preliminary probes into HDFC Bank over alleged misleading disclosures tied to a ₹45 crore payment to MSRDC — sending ADRs down 4.1% in May and domestic shares down 1.44% on Friday. No lawsuit has been filed yet, but the bank's silence on stock exchanges is drawing scrutiny of its own.
Key Takeaways
HDFC Bank shares fell up to 1.44 per cent on the BSE on Friday, 24 July .
Three US law firms — Law Offices of Howard G.
Smith , Law Offices of Frank R.
Cruz , and Glancy Prongay Wolke & Rotter — have announced separate preliminary securities investigations.
The probes are linked to a 27 May report alleging HDFC Bank paid ₹45 crore to MSRDC to attract institutional deposits, booked as marketing expenses.
HDFC Bank ADRs fell $1.02 (4.1 per cent) to $23.78 on 27 May following that report.
No securities class action lawsuit has been filed; the investigations remain at a preliminary stage.
HDFC Bank had not issued any exchange disclosure to the NSE or BSE as of 10:30 am on Friday.
HDFC Bank shares fell as much as 1.44 per cent in early trade on Friday, 24 July, after three US law firms announced separate preliminary investigations into whether India's largest private sector lender may have violated US federal securities laws. The probes add fresh pressure on a stock that has already shed more than 25 per cent over the past year.
The Investigations and Who Is Behind Them
The inquiries were announced through separate press releases by the Law Offices of Howard G. Smith, the Law Offices of Frank R. Cruz, and Glancy Prongay Wolke & Rotter. According to the firms, the investigations centre on whether HDFC Bank and certain of its executives made materially misleading statements or withheld information material to investors, potentially in breach of US federal securities statutes.
Importantly, no securities class action lawsuit has been filed at this stage. The probes are described as preliminary assessments to determine whether legal action is warranted. Each firm has invited investors who suffered losses in HDFC Bank American Depositary Receipts (ADRs) to come forward with relevant information.
What Triggered the Scrutiny
The investigations stem from a 27 May report by The Indian Express, which alleged that HDFC Bank made payments of approximately ₹45 crore (around $4.7 million) to the Maharashtra State Road Development Corporation (MSRDC) in order to attract large institutional deposits. The report further alleged that these payments were recorded as marketing expenses and that the bank's Chief Executive Officer was aware of the transactions.
On the day the report was published, HDFC Bank's ADRs fell $1.02, or 4.1 per cent, to close at $23.78, according to the law firms. That single-session decline appears to have drawn the attention of US securities litigators scanning for potential investor harm.
HDFC Bank's Stock Performance
On the Bombay Stock Exchange (BSE), HDFC Bank shares dropped as much as 1.44 per cent during early trade on Friday. The stock's recent trajectory has been difficult: it has declined more than 25 per cent over the past one year, nearly 20 per cent in the last six months, and approximately 25 per cent in the current calendar year. This comes amid broader investor concerns about the bank's deposit mobilisation strategy and margin trajectory.
Bank's Response and Regulatory Disclosure
As of 10:30 am on Friday, HDFC Bank had not issued any statement on the matter to either the National Stock Exchange (NSE) or the BSE. The absence of an exchange filing is notable given that the investigations are now in the public domain and could be considered price-sensitive information under Indian securities regulations. Analysts and investors are likely to watch for any official response from the bank in the hours and days ahead.
What Comes Next
The three US firms are in a fact-gathering phase. Should they find sufficient grounds, a formal securities class action could follow — a process that typically involves a lead plaintiff appointment and court certification. For Indian companies listed on US exchanges via ADRs, such lawsuits can result in significant legal costs and reputational drag, regardless of their ultimate outcome. HDFC Bank's next move — whether a denial, a clarification, or silence — will be closely watched by both domestic and overseas investors.
Point of View
The bank may have a disclosure obligation it has yet to fulfil; if it is not material, the bank needs to say so clearly. The stock's 25 per cent decline over the past year already reflects eroding investor confidence, and an information vacuum at this juncture risks compounding that. HDFC Bank's credibility as a blue-chip holding depends as much on its communication discipline as on its balance sheet.
NationPress
24 Jul 2026
Frequently Asked Questions
Why are US law firms investigating HDFC Bank?
Three US law firms have launched preliminary probes to determine whether HDFC Bank and certain executives made materially misleading statements or failed to disclose information relevant to investors, potentially violating US federal securities laws. The investigations were triggered by a 27 May report alleging the bank paid ₹45 crore to the Maharashtra State Road Development Corporation (MSRDC) to attract institutional deposits, with the payments reportedly booked as marketing expenses.
Has a lawsuit been filed against HDFC Bank in the US?
No. As of 24 July, no securities class action lawsuit has been filed against HDFC Bank. The investigations by the three law firms are preliminary and are intended only to assess whether sufficient grounds exist to pursue legal action.
How much did HDFC Bank's ADRs fall after the original report?
HDFC Bank's American Depositary Receipts (ADRs) fell $1.02, or 4.1 per cent, to close at $23.78 on 27 May, the day The Indian Express published its report on the alleged MSRDC payments, according to the US law firms.
What is the MSRDC payment allegation against HDFC Bank?
A 27 May report by The Indian Express alleged that HDFC Bank made payments of approximately ₹45 crore to the Maharashtra State Road Development Corporation (MSRDC) to attract large institutional deposits, and that these payments were recorded as marketing expenses. The report also alleged that the bank's CEO was aware of the transactions.
How has HDFC Bank's stock performed recently?
HDFC Bank shares have declined more than 25 per cent over the past one year, nearly 20 per cent in the last six months, and around 25 per cent in the current calendar year. On Friday, 24 July, the stock fell as much as 1.44 per cent in early trade on the BSE following the US probe announcements.
