IndusInd Bank shares in focus today; here's why

Shares of IndusInd Bank Ltd are in focus today, April 1, on report the bank has carried out multiple deals with private banks such as Federal Bank and ICICI Bank by transferring highly-rated corporate loans in a bid to shore up liquidity. The two banks acquired highly-rated loans at an interest rate of 7.5-8 per cent through the traditional Inter-Bank Participation Certificate (IBPC) market, ET reported citing sources.

The banking stock last traded 4.33 per cent higher at Rs 677.65 on BSE. The fresh move by IndusInd Bank came amid the ongoing investigation into accounting lapses that probably eroded Rs 2,100 crore if its networth. The fact that its long-standing derivatives accounting discrepancies remained undetected for 5–7 years raises several concerns over internal controls, impacting the Street’s confidence in the bank’s governance, Ventura Securities said in a note. 

Investors fear there could be a likely flight of deposits.  The Reserve Bank of India (RBI) had directed IndusInd Bank’s management to complete the remedial actions in full in Q4FY25 i.e. by March 31, following the necessary disclosures to all stakeholders. Investors were anticipating outcome of the report from PricewaterhouseCoopers (PwC) that may outline the actual losses incurred by the bank.

IndusInd Bank, which saw strong growth following its 2020 recapitalization, is now facing multiple headwinds that cloud its near-term outlook. The most material concern is a 2.35 per cent overstatement in its derivatives portfolio, stemming from long-standing internal trade
accounting discrepancies. 

"This has raised red flags around internal controls and could possibly trigger additional provisioning, restatements, and regulatory scrutiny, given the newly appointed external agency discovers additional discrepancies," Ventura Securities said.

Ventura Securities said the bank’s microfinance portfolio also remains under pressure, with slippages driving the 30–90 DPD bucket to 4 per cent, resulting in elevated credit costs. 

In Karnataka, collection efficiency has weakened due to regulatory overhang, but the impact remains contained, with just 1 per cent of the total book in affected districts and the state accounting for 13 per cent of the microfinance portfolio. 

"The Karnataka ordinance, which came into effect in Feb’25, could result in weak collections and possibly higher slippages. With the RBI granting only a one-year extension to CEO Sumant Kathpalia, while it will be business as usual at the bank, the street will be focusing on strategies that the new CEO will undertake for the bank to hike its growth trajectory," Ventura said.