'Every bull market, they find a way’: Startup founder slams IndusInd Bank over ₹2,000 crore hit

As IndusInd Bank grapples with a Rs 2,000 crore hit to its net worth, a market expert has called out financial firms that repeatedly expand aggressively in bull markets only to face harsh realities in bear cycles.

“IndusInd, IIFL etc r repeat offenders. Every bull market, they find a way to grow and every bear market, the reality of that growth comes out in public. If anyone is surprised, it's a matter of surprise,” Kumar Saurabh, founder of education venture Scientific Investing, wrote on X. 

He further said that for any financial company, “the first and most important research aspect is to go through their deeds of last bull market cycle.”

Saurabh’s remarks come as IndusInd Bank disclosed accounting discrepancies related to derivative transactions spanning five to seven years. The lender told analysts on Monday that it expects a net worth decline of ₹1,600-2,000 crore (about 2.35% of total net worth) as it moves to address the issue.

“We began reviewing our internal trade book and noticed some discrepancies in our business, which were identified between September and October. We then hired an external agency to conduct a review,” IndusInd Bank CEO Sumant Kathpalia told analysts. The final audit report is expected by March-end or early April, he added.

The Reserve Bank of India (RBI) has already been informed, and the bank has shared a preliminary and final report with the regulator. The losses will be reflected either in Q4 FY24 or Q1 FY25 earnings, depending on the audit review.

IndusInd Bank’s stock has suffered a steep decline, falling 26% in a single session to ₹666 from ₹900. The banking stock has now dropped 53% over the past year, triggering multiple downgrades from brokerage firms. 

Kotak Institutional Equities slashed its target price from ₹1,400 to ₹850 and downgraded the stock to ‘Reduce’ from ‘Buy’.

ICICI Securities and Nuvama pegged their target prices at ₹850 and ₹750, respectively.
Motilal Oswal (MOFSL) revised its estimate to ₹925, while Nirmal Bang sees it at ₹900.
PL Capital remains the most optimistic, setting a target of ₹1,000.
The stock hit its lower circuit at ₹720.50, reflecting deep investor concerns over the bank’s financial stability.