IndusInd Bank Shares Plunge 25% Amid Derivatives Account Discrepancy
Mumbai, India – March 11, 2025: IndusInd Bank’s share price witnessed a sharp decline of 25% on Tuesday, trading at ₹720 per share on the National Stock Exchange (NSE) at 10:00 AM. The slump comes after the bank disclosed significant discrepancies in its derivatives account balance, raising concerns over its financial stability.
The stock had already been under pressure after hitting a 52-week low on Monday, following the Reserve Bank of India’s (RBI) decision to approve a one-year extension for the bank’s MD and CEO, Sumant Kathpalia. The recent revelations regarding the derivatives account have further exacerbated investor worries, leading to a steep correction in share value.
Discrepancies in Derivatives Account
In an official notification to stock exchanges, IndusInd Bank revealed that an internal review of its derivatives portfolio uncovered accounting discrepancies. These issues were identified post-implementation of the RBI’s circular on the valuation and operation of investment portfolios for commercial banks.
According to the bank, the estimated financial impact of these discrepancies is expected to be around ₹1,577 crore, which amounts to 2.35% of its net worth. To ensure accuracy and transparency, the bank has engaged a reputed external agency to independently validate its findings. The final report from this review is still pending, and the bank will determine any financial statement adjustments accordingly.
Market Reaction and Share Price Performance
IndusInd Bank’s stock has been in free fall since touching a 52-week high of ₹1,498 per share in September 2024. With Tuesday’s sharp decline, the stock has now corrected nearly 40% from its peak levels. This latest development has added to investor concerns, particularly after the bank reported a 40% drop in net profit during Q3FY25. Thesteep decline in earnings has fueled fears about the bank’s long-term profitability and risk management practices.
Investor Sentiment and Future Outlook
The recent developments have rattled investor confidence, with analysts cautioning that further downside risks remain if the external review reveals more severe financial irregularities. The extension of CEO Sumant Kathpalia’s tenure was expected to bring stability, but the emergence of accounting discrepancies has now raised fresh governance concerns.
Going forward, market participants will closely monitor:
– The findings of the external agency reviewing the discrepancies.
– Management’s response and corrective actions taken by the bank.
– The potential impact on earnings and overall financial stability.
Despite the current turmoil, analysts suggest that strong regulatory oversight and timely corrective measures could help restore investor trust. However, in the short term, IndusInd Bank’s stock may continue to face selling pressure as uncertainties linger over its financial health and risk management practices.
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*Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors are advised to conduct their own research or consult financial experts before making any investment decisions.