IndusInd Bank Share Price in Focus Today After 27% Drop

A day after IndusInd Bank shares fell 27%, the stock is in focus as CEO Sumant Kathpalia assured that the bank aims to recover the losses caused by an accounting issue in past derivative transactions within this quarter. Despite concerns, Kathpalia stated that both the fourth quarter and full-year results would remain profitable.

This statement contrasts with earlier analyst predictions that hinted at potential losses for the March quarter. The late disclosure of the accounting discrepancy worried investors, as analysts noted that such issues could impact confidence more than a backdated non-performing loan (NPL).

Bank Identified the Issue in October

Kathpalia explained that the bank first identified the issue on October 24 and immediately launched an internal review along with an external agency. However, at that time, they were unaware of the full scale of the problem, which developed over 7 to 8 years.

He emphasised that this was a one-time issue and not a recurring problem and assured investors that the bank would return to growth and profitability soon.

Hinduja Group Stocks Decline

On Tuesday, 5 out of 6 Hinduja Group stocks ended lower, wiping out nearly ₹21,000 crore in market capitalisation.

• IndusInd Bank share dropped 27.17% to ₹655.95 on the BSE.
• Ashok Leyland share fell 3.24% to ₹200.
• Hinduja Global Solutions share declined 3.68% to ₹500.
• GOCL Corporation share dropped 3.48% to ₹281.10.
• Gulf Oil Lubricants India share was the only stock that gained, rising 2.29% to ₹1,216.

Promoters Assure Stability

Ashok Hinduja, a key promoter, urged shareholders not to panic. He clarified that the issue was discovered by IndusInd Bank’s management itself, not by auditors or regulators. He also confirmed that promoters are awaiting RBI approval to increase their stake in the bank from 15% to 26%. Once approved, they will immediately inject capital into the bank.

Hinduja called the issue “routine” and acknowledged concerns about the delay in informing investors. He reassured that IndusInd Bank has successfully handled past challenges over its 30-year history and this issue would also be resolved soon.

Conclusion

Despite the sharp decline, IndusInd Bank’s management remains confident in resolving the issue and restoring growth. Promoters plan to increase their stake, reinforcing stability.

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