Shares of South Indian Bank fell nearly 17% during intra-day trading on Wednesday after managing director and chief executive officer Murali Ramakrishnan opted out of re-appointment due to personal reasons.
The stock hit an intra-day low of Rs 13.79 on the BSE, its lowest since November 2022. It closed 12.7% lower at Rs 14.44.
While the management has clarified that it will be ‘business as usual’, the uncertainty over Ramakrishnan’s successor spooked investors.
“The bank was showing a very good improvement on key indicators and it they have a Vision 2025 where a few milestones were to be achieved. They were positively progressing towards their goal. Ramakrishnan’s decision to opt out midway has created anxiety in the market,” Cyril Charly, research analyst — banking and finance, Geojit Financial Services, said. “Another concern is how quickly will the board be able to find a replacement, as well as the background of the newly-assigned person… Until his successor is confirmed, the performance of the stock will be muted.”
“The bank is in the path of selecting a new MD and CEO and our strategy is to get a professional as efficient as Mr Ramakrishnan. We want a minimum three-month concurrent running with Ramakrishnan so that the entire transformation underwent by the bank as well as the strategic objectives of the board are understood by the new CEO. We want a seamless change in leadership. We are working on it. The board or the MD has no difference of opinion on what is the future course of action,” Salim Gangadharan, chairman, South Indian Bank, said in a press conference on Wednesday.
The bank on Tuesday appointed a headhunter to shortlist suitable candidates for the post of . Both external and internal candidates will be considered.
“The search process has just started. The process will be rigorous as running a bank at this point of time requires competency, with so many changes happening in the segment. We will ensure that right persons are identified for the role. It is too early to talk about what will happen after September,” Ramakrishnan said.