IndusInd Bank shares jump 9% in two days; here’s why

Shares of IndusInd Bank extended its gaining streak for the second straight session on Wednesday, rising nearly 4% in intraday trade. The private lender’s share price has bounced 9% in two sessions despite sharp volatility in the broader market amid value buying by investors at attractive levels. The stock witnessed sharp correction last month, with the stock hitting 52-week low of ₹605.40 on March 12, 2025, following the disclosure that the bank had found discrepancies in its derivatives portfolio.

Continuing its uptrend for the second day, IndusInd Bank share price rose as much as 3.76% to ₹708.45 on the BSE. Early today, the banking stock opened flat at ₹682.75 after ending 5.1% higher in the previous session.

The stock was currently trading 3.1% higher at ₹704, with a market capitalisation of ₹54,845 crore. The largecap stock has rebounded 17% against its 52-week low level, while it is still down 55% from its 52-week high of ₹1,576 touched on April 8, 2024.

In the last one month, IndusInd Bank shares have lost over 28%, while it is down 27% on year-to-date (YTD) basis. The counter has delivered negative return of 55% in the last one year, whereas it has plummeted nearly 50% in six months.

On March 11, 2025, the bank logged record single-day loss of ₹19,000 crore as stock plunged over 27% after it informed exchanges about huge accounting discrepancies in its forex derivatives portfolio, which is expected to have an adverse impact on its net worth and profitability. Based on preliminary findings, the accounting flaws are estimated to have an impact of 2.35% on its net worth, amounting to ₹1,580 crore. The issue, spanning 5–7 years until March 31, 2024, was discovered in an internal review, raising concerns over inflated profits and auditing failures.  The loss, to be adjusted in Q4 FY25 financials, will primarily impact net interest income.

Raising concerns over delayed disclosure, Nuvama said that it would impact credibility and earnings of the bank promoted by Hinduja Group. “The time line is discomforting—the CFO resigned just before the Q3 earnings, the CEO recently got a one-year extension instead of three and now a derivatives-induced dislocation,” it said in a note.

IndusInd Bank's CFO Gobind Jain had resigned on January 17, just before the Q3 FY25 earnings, which was released on January 31, 2025. Adding to the woes, the Reserve Bank of India (RBI) granted only a one-year extension to its incumbent CEO and MD Sumant Kathpalia, instead of the three-year term recommended by the board.

Foreign brokerage Moody's also placed IndusInd Bank’s credit assessment on review for downgrade, saying that the impact of the derivatives transactions, coupled with the ongoing stress in the retail unsecured loans, is likely to hurt the IndusInd Bank’s profitability, capital and funding. The agency has affirmed IndusInd Bank Ltd’s ‘Ba1’ foreign currency (FC) and local currency (LC) bank deposits and issuer ratings. At the same time, it has placed IndusInd's ba1 Baseline Credit Assessment (BCA) and adjusted BCA under review for downgrade.

On March 20, 2025, the board of the bank appointed an independent professional firm to conduct a comprehensive investigation to identify the root cause of the discrepancies, assess the correctness and impact of the accounting treatment of the derivative contracts.

Last month, the Reserve Bank of India (RBI) also issued a statement saying that the private sector bank is “well-capitalised” and holds a “satisfactory” financial position.

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