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IndusInd Bank Shares Plunge 27% to 52-Week Low: Accounting Discrepancies Spark Investor Concerns March 11, 2025, 4:54 PM IST – IndusInd Bank shares crashed by a staggering 27% on Tuesday, hitting a 52-week low of Rs 655.95 on the Bombay Stock Exchange (BSE). This marked the steepest single-day decline in the bank’s stock history, wiping out over Rs 18,000 crore in market capitalization. The dramatic sell-off was triggered by the bank’s disclosure of accounting irregularities in its forex derivatives portfolio, raising red flags about governance and financial stability. What Happened to IndusInd Bank Shares? On Monday evening, IndusInd Bank revealed discrepancies in its derivatives accounting, estimating a potential post-tax impact of Rs 1,530 crore to Rs 2,000 crore—approximately 2.35% of its net worth as of December 2024. The issue, linked to internal foreign exchange derivative transactions spanning 5-7 years, has cast a shadow over the bank’s credibility. The financial hit is expected to reflect in the bank’s Q4 FY25 earnings, prompting an immediate market reaction. The bank has appointed an external agency to conduct an independent review, with results anticipated by the end of the fiscal year. Despite assurances from management that profitability and capital adequacy remain robust enough to absorb this one-time blow, investor confidence has taken a severe hit. Why Did IndusInd Bank Shares Crash? The sharp decline in IndusInd Bank’s stock price follows a series of unsettling developments: Accounting Irregularities: The discovery of valuation inconsistencies in the derivatives portfolio has raised concerns about internal controls and transparency. Leadership Uncertainty: The Reserve Bank of India (RBI) recently approved only a one-year extension for CEO Sumant Kathpalia, against the bank’s request for a three-year term. This, coupled with the CFO’s resignation prior to Q3 earnings, has fueled speculation about governance issues. Brokerage Downgrades: Multiple brokerages, including Motilal Oswal (target price Rs 925, ‘Neutral’), Nuvama (target Rs 750, ‘Reduce’), and Emkay Global (target Rs 875, downgraded from ‘Buy’ to ‘Add’), slashed their ratings and price targets, citing credibility concerns and earnings risks. Analysts at Jefferies labeled the situation a “clear case of weak internal controls,” warning of a potential “derating” of the stock. Kotak Institutional Equities emphasized that rebuilding trust could take time, especially given the bank’s recent string of negative events. Market Impact and Investor Sentiment IndusInd Bank’s plunge dragged down broader banking indices, with the Nifty Bank index dropping 0.75% to 47,853.95 and the Nifty Private Bank index declining 1.38% to 23,817.20. The stock’s 52-week low of Rs 655.95 reflects a 57% loss over the past year and a 53% decline in the last six months, according to Trendlyne data. Mutual funds holding over 20.88 crore shares—valued at Rs 20,670 crore as of February—saw their investments shrink to Rs 13,770 crore post-crash, a Rs 6,900 crore hit. Major holders like ICICI Pru MF (Rs 3,779 crore), HDFC MF (Rs 3,564 crore), and SBI MF (Rs 3,048 crore) bore the brunt of the correction. What’s Next for IndusInd Bank? The bank’s management has sought to reassure stakeholders, stating that its capital adequacy and profitability can withstand the financial impact. However, the external audit’s findings, leadership transitions, and governance reforms will be critical in determining the stock’s trajectory. Analysts suggest that clarity on these fronts could stabilize sentiment, but for now, uncertainty prevails. Investors are also watching the broader banking sector, which has faced pressure from economic uncertainty and global market volatility. IndusInd Bank’s valuation, now at 0.71 times its 12-month forward price-to-book multiple, aligns with mid-sized PSU banks—a stark fall from its nearly two-times multiple in January 2024. IndusInd Bank Share Price Today As of 4:54 PM IST on March 11, 2025, IndusInd Bank shares closed at Rs 655.95 on the BSE, down 27.17% from Monday’s close of Rs 900.60. The stock hit an intraday low of Rs 667, marking its lowest level since November 2020. With a market cap of Rs 70,161 crore, the bank remains under intense scrutiny. Should You Invest in IndusInd Bank Shares? For investors, the current scenario presents a high-risk, high-uncertainty situation. While some see the steep correction as a potential buying opportunity given the bank’s long-term fundamentals, others caution against fresh investments until the dust settles. Experts recommend consulting certified financial advisors before making decisions, given the stock’s volatility and ongoing developments. Stay tuned for the latest updates on IndusInd Bank shares as the situation unfolds.