IndusInd Bank’s stock is in freefall. After the private lender disclosed accounting discrepancies tied to internal derivatives, the bank’s shares have nosedived more than 38% over six consecutive trading sessions — and investors are scrambling to make sense of the chaos.
Six-Day Bloodbath Wipes Out Billions
It’s been a brutal week for IndusInd Bank shareholders. The stock tumbled 7.7% on Wednesday, hitting a fresh low of ₹605.40 per share on the BSE. This marks the sixth straight day of losses, with the most shocking drop — a staggering 27% — happening on Tuesday alone.
The damage? Over 38% of IndusInd Bank’s market capitalization evaporated in less than a week. That’s billions in value gone, leaving investors reeling.
What triggered this meltdown? The bank admitted to accounting irregularities linked to internal derivatives — a revelation that shattered market confidence.
Financial Fallout: Numbers Paint a Grim Picture
The numbers are as ugly as they sound. IndusInd Bank’s internal review found a one-time hit equivalent to ~2.35% of its net worth, which stood at ₹67,100 crore as of December 2024. That translates to a ₹1,577 crore post-tax blow — or ₹2,100 crore before taxes.
The financial bleeding doesn’t stop there. Analysts expect the bank to report a Q4FY25 loss, dragging down the full-year earnings by approximately 25%.
Even key financial ratios are taking a hit:
- CET-1 ratio (a core measure of financial strength) is projected to drop 37 basis points, landing at 14.8%.
Brokerages Slam the Brakes on IndusInd Stock
The fallout isn’t limited to share prices. Brokerage firms are rapidly adjusting their stance on IndusInd Bank. Prabhudas Lilladher, a leading brokerage, slashed its rating from ‘Buy’ to ‘Hold’, citing the unpredictable earnings outlook and leadership uncertainty.
Here’s how their revised projections look:
| Metric | FY25 Estimate | FY26 Estimate | FY27 Estimate |
|---|---|---|---|
| Adjusted Book Value (ABV) | Down 2.3% | Down 2.5% | Down 2.7% |
| Price-to-Book Multiple | 1.0x (cut from 1.4x) | — | — |
The sharp downgrade signals a shift from optimism to caution — a reflection of the market’s trust crisis.
Promoter Hinduja Stands by CEO
While the market punishes the stock, IndusInd Bank’s leadership isn’t backing down. Ashok Hinduja, chairman of IndusInd International Holdings Ltd (IIHL) — the bank’s promoter — publicly reaffirmed his support for Sumant Kathpalia, the bank’s MD and CEO.
Hinduja expressed confidence in Kathpalia’s ability to guide the bank through the storm, emphasizing that leadership stability is crucial during turbulent times. But whether investor confidence rebounds remains an open question.
One thing is clear: IndusInd Bank is facing its toughest test yet. And the market will be watching — nervously — to see what happens next.
