IndusInd Bank’s shares dropped by 27% on Tuesday. A Reuters analysis indicated that the bank’s stock hit its lowest point since November 2020 and was poised for its largest decline since March 2020.
Shock to the Stock Market: IndusInd Bank Drops 27%
IndusInd Bank faced a major financial setback on March 11, 2025, after revealing issues in its derivatives portfolio. Shares plunged 27% to ₹666.25 on the NSE. An internal review uncovered accounting irregularities, estimating a financial hit of ₹1,530-2,000 crore. The bank plans to absorb this in Q4 FY25 or Q1 FY26, with a post-tax impact of ₹1,577 crore. An external audit by month-end will assess the full damage.
Why are shares of IndusInd Bank falling today?
Following the disclosure of irregularities in its derivatives accounting, which analysts predict will negatively impact the bank’s earnings, IndusInd Bank shares began to decline.
Although they did not provide more information, IndusInd Bank disclosed on Monday that it had understated the hedging expenses associated with certain previous foreign exchange transactions, which caused a 2.35% decline in its net worth as of December 2024.
The company revealed last week that RBI had only given its CEO and MD a one-year extension, instead of the three years the board had requested. Experts say this increases stock uncertainty.
Economic Effects and Potential :
The bank projects a post-tax impact of ₹1,577 crore and a financial hit of ₹1,530–2,000 crore. Either Q1 FY26 or Q4 FY25 will absorb this. To determine the full scope of the problem, investors are waiting for the external audit by the end of the month.
Issues with Leadership and Market Response :
Concerns regarding leadership stability have been raised by the RBI’s decision to only extend the CEO’s term by one year. The stock has experienced a steep sell-off, falling 27% to a 52-week low, in addition to the financial disparities.
In conclusion,
Investor concerns about financial irregularities and unclear leadership have caused IndusInd Bank’s stock to decline. The 1,530–2,000 crore impact on its derivatives portfolio and the RBI’s limited CEO tenure extension have eroded market confidence. The external audit by month’s end will be essential in assessing the full scope of the problem and influencing investor sentiment moving forward, as the bank intends to absorb these losses in the upcoming quarters.
