During Thursday’s trading session, the shares of a private sector bank offering microfinance, personal loans, advanced digital banking facilities, and other financial services slumped nearly 2.4 percent on BSE.
The bank has been in the spotlight due to discrepancies in internal trades and various allegations. Once again, it finds itself in the headlines today. Here’s the latest update, along with a concise timeline of key events.
Price Movement
With a market cap of Rs. 51,133.2 crores, the shares of IndusInd Bank Limited hit an intraday low at Rs. 640.55, down by around 2.4 percent, as compared to its previous closing price of Rs. 656.05. The stock has delivered negative returns of nearly 57 percent over a one-year period, as well as over 32 percent returns year-to-date.
What’s the News
The Securities and Exchange Board of India (SEBI) is investigating a potential case of insider trading involving senior officials at IndusInd Bank, following substantial accounting irregularities at the bank, according to several sources. The market regulator has requested details about trades made by five senior officials while they were in possession of unpublished price-sensitive information related to IndusInd.
SEBI is also investigating whether the bank violated its disclosure regulations, as per the report. To address the issue, SEBI has hired an independent firm to investigate the accounting lapses and discrepancies, which have raised concerns about the bank’s governance practices.
Earlier in March, the bank revealed that it had identified accounting errors in how it booked currency derivatives, dating back at least six years, with a projected impact of around $175 million.
Also read: Stock under ₹70 in focus after acquiring 48,213 shares in TD Power Systems
Events Recap
September 2023: RBI issued new regulations regarding the classification, valuation, and operation of investment portfolios for commercial banks, effective April 1, 2024. This prompted banks, including IndusInd, to review their derivative positions more closely.
April 1, 2024: New RBI regulations took effect, requiring banks to mark all their gains and losses to market rates daily and banning internal hedging contracts. This change forced IndusInd Bank to reassess its accounting practices for derivatives.
October 2024: IndusInd Bank hired an external agency to validate its accounting practices after concerns arose regarding discrepancies in its internal trades. The review aimed to clarify the financial impact of its derivative accounting methods.
March 2025: IndusInd Bank’s shares declined by over 27 percent following the announcement of a ~Rs. 1,577 crore discrepancy in its forex derivatives portfolio. The bank acknowledged that it had not properly accounted for losses on forex derivatives/swap transactions executed over the previous 5-7 years.
Further disclosures indicated that the total estimated pre-tax loss could be as high as Rs. 2,100 crore, as losses were not reflected in net interest income (NII) while corresponding gains were recorded in the profit and loss statement.
IndusInd Bank’s CEO, Sumant Kathpalia, stated that the discrepancies represented about 2.35 percent of the bank’s net worth as of December 2024. The bank planned to absorb the entire discrepancy in its derivative accounting in Q4 FY25.
Meanwhile, reports surfaced suggesting that the RBI was aware of these accounting issues before granting Kathpalia a one-year extension as CEO, raising concerns about internal governance and leadership at the bank.
Top Executives Sell-Offs
The top executives of IndusInd Bank, CEO Sumant Kathpalia and Deputy CEO Arun Khurana, collectively sold shares worth Rs. 157 crore between 2023 and 2024.
Sources indicate that Kathpalia sold nearly 9.5 lakh shares, valued at Rs. 134 crore, between May 24, 2023, and June 25, 2024, while purchasing 3.96 lakh shares worth Rs. 34 crore. Likewise, Khurana offloaded 5.5 lakh shares for Rs. 82 crore between 2023 & 2024 and acquired 2.38 lakh shares worth Rs. 25 crore.
The private lender has been in the news after announcing a 2.4 percent impact on its net worth due to changes in the valuation of derivatives transactions. This revelation triggered multiple stock downgrades, coming shortly after the RBI granted CEO Kathpalia a 1-year extension, rejecting his request for a 3-year renewal.
Financial Performance
IndusInd Bank reported a marginal decline in net interest income (NII), experiencing a year-on-year decrease of nearly 1.3 percent, falling from Rs. 5,295.6 crores in Q3 FY24 to Rs. 5,228 crores in Q3 FY25. Similarly, during the same period, the bank’s net profit decreased from Rs. 2,301.4 crores to Rs. 1,402.3 crores, representing a significant growth of around 39 percent YoY.
About the Bank
IndusInd Bank Limited is engaged in the business of providing a wide range of banking products and financial services to corporate and retail clients besides undertaking treasury operations.
Written by Shivani Singh
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
