Mumbai, March 11 (IANS). IndusInd Bank’s share price fell 27.06 percent to close at Rs 656.8 per share on Tuesday. Because the internal review of the lender was estimated to have an adverse effect of about 2.35 percent on its net worth (by December 2024).
The stock also touched a 52-week new low-lying level during the Intra-Day Trading Session, indicating a loss in the fifth session.
This drastically declined after private lender disclosed discrepancies in its derivative portfolio.
This decline was the largest single-day fall in the history of the bank, so the bank’s market price was reduced by about Rs 19,500 crore.
With this decline, IndusInd Bank lost about Rs 78,762 crore in market capitalization with its peak in January 2024.
The total assets of the bank are expected to fall by about Rs 2,100 crore after the anomalies of 2.35 percent of anomalies in its derivative portfolio during the internal review.
The Hinduja promoted lender is planning to compensate for its fourth quarter income or this loss in the first quarter of FY 2026.
The internal review findings have also started a series of target price cuts from several brokerage for bank stocks, which is only a few days after the Reserve Bank of India has given only one year extension to Chief Executive Officer Sumant Kathpalia, a few days after the extending of only one year.
The bank has appointed PWC India, a leading counseling firm for external review of discrepancies found in its Treasury Book.
The report states that PWC is expected to offer its conclusions within two to three weeks.
City said IndusInd Bank would face the “litmus test” from the view point of success and could evaluate both the board external and internal candidates.
PL Capital- Gaurav Jani of Prabhudas Liladhar said, “We have ‘hold’ the IndusInd Bank ‘by’, because we have reduced the multiple from 1.4 times to 1.4 times due to the uncertainty of income quality and future leadership. It has remained a problem for Indusind Bank since the detection in derivative accounting has been reduced to 1.0 times the multiple. Till 2024 was in a period of 5-7 years, however, due to RBI instructions, there is no irregularity since 1 April 2024. “
He further said, “In our view, this episode affected the RBI’s decision to extend the tenure of MD and CEO for only 1 year. The evaluation on FY 2027 ABV is 0.9 times and we have reduced the target price from Rs 1,400 to Rs 1,000.”
-IANS
SKT/CBT
