IndusInd Bank shares plunged over 27% on Tuesday, March 11, 202,5 after the bank disclosed “discrepancies” in certain portfolios.
These led to an estimated adverse post-tax impact of 2.35% on its net worth as of December 2024. This massive stock erosion has significantly affected mutual fund holdings, resulting in losses amounting to thousands of crores.
According to the news reports, as of February 28, 50 mutual funds collectively held over 22.56 crore shares of IndusInd Bank, for a total value of ₹22,339 crore.
However, with the stock crash, these funds’ exposure has shrunk to approximately ₹15,000 crore, marking a decline of about ₹7,339 crore.
Several mutual funds suffered substantial losses due to the steep decline in IndusInd Bank’s stock price. Among them, the hardest hit are:
The UTI Nifty 50 Exchange Traded Fund suffered a significant setback due to the sharp decline in IndusInd Bank’s stock. As of February 28, 2024, the fund held 35.94 lakh shares of the bank. Following the stock’s steep plunge, the fund recorded a loss of ₹120 crore.
The UTI Value Fund-Regular Plan-Growth faced considerable losses following IndusInd Bank’s stock crash. Holding 19 lakh shares of the bank, the fund saw its investment value erode by ₹63.46 crore.
The UTI Nifty Bank Exchange Traded Fund took a significant hit from IndusInd Bank’s stock slump. With 15.78 lakh shares in its portfolio, the fund suffered a loss of ₹52.70 crore.
The Bandhan Flexi Cap Fund Growth was among the mutual funds affected by IndusInd Bank’s stock plunge. Holding 13.80 lakh shares, the fund incurred a loss of ₹46.09 crore.
The UTI Mid Cap Fund Regular Plan-Growth faced substantial losses due to the steep decline in IndusInd Bank’s stock. With 13.27 lakh shares in its portfolio, the fund recorded a loss of ₹44.32 crore.
UTI Mutual Fund is the most exposed to IndusInd Bank’s stock, holding approximately 1.27 crore shares across 15 different schemes, as per Trendlyne.com. Other fund houses with significant exposure include Bandhan Mutual Fund, Quant Mutual Fund, Motilal Oswal Mutual Fund, LIC Mutual Fund, Sundaram Mutual Fund, and Invesco India Mutual Fund.
Interestingly, mutual funds have been steadily increasing their stake in IndusInd Bank over the past quarters. Their stake in the bank stood at:
This progressive rise in holdings highlights the confidence mutual funds had in the stock before the latest revelation.
The heavy sell-off in IndusInd Bank shares came after the lender’s internal review estimated a negative impact of 2.35% on its net worth due to discrepancies in specific portfolios.
This announcement followed the Reserve Bank of India’s (RBI) directive to banks, instructing them to conduct a thorough review of their investment portfolios.
On March 11, 2025, Tuesday, IndusInd Bank share price ended by 27.17% down at ₹655.95 apiece on the Bombay Stock Exchange (BSE). The sharp decline has rattled investors and mutual fund managers, raising concerns over further volatility in the banking sector.
IndusInd Bank’s stock crash, triggered by portfolio discrepancies, has wiped out over ₹7,339 crore in mutual fund investments, severely impacting major funds like UTI and Bandhan.
The bank’s stock had gained mutual funds’ confidence over recent quarters, but the sudden plunge raises concerns over banking sector stability.
As investors reassess risks, market volatility may persist, highlighting the need for stringent financial oversight and regulatory vigilance in the sector.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Mar 12, 2025, 8:04 AM IST
Dev Sethia
Dev is a content writer with over 2 years of experience at Business Today, Times of India, and Financial Express. He has also contributed stories in Hindi for BT Bazaar and Khalsa Bandhan News Paper. A journalism postgraduate from ACJ-Bloomberg, Dev enjoys spending his spare time on the cricket pitch.
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