IndusInd Bank Share Price Recovers but Still Down 31% in March

Several leading mutual funds offloaded IndusInd Bank shares in February 2025, marking a significant reduction in their exposure to the private lender. Among the Nifty 50 stocks, IndusInd Bank witnessed the largest decline in mutual fund ownership.

According to a  report, mutual fund holdings in IndusInd Bank fell by 7.4% to ₹20,020 crore. The total number of shares held by fund houses declined by 7.3% to 20.22 crore by the end of February. This pre-emptive sell-off coincided with emerging concerns over the bank’s financial reporting.

IndusInd Bank’s Accounting Discrepancy and Market Reaction

On March 10, 2025, IndusInd Bank disclosed an accounting discrepancy related to derivative transactions conducted before April 1, 2025. The estimated financial impact of this issue was calculated at 2.35% of the bank’s net worth, amounting to approximately ₹1,577 crore.

The market responded sharply to the announcement, leading to a 27% plunge in IndusInd Bank’s share price on March 11. This translated to a market capitalisation loss of nearly ₹20,000 crore. Additionally, the stock was placed under the Futures & Options (F&O) ban list, reflecting heightened caution among investors. For the month of March so far, the IndusInd Bank share price is down by 31%. 

IndusInd Bank’s CEO and Managing Director, Sumant Kathpalia, revealed that the accounting lapse was identified between September and October of the previous year. The bank had provided an initial update to the Reserve Bank of India (RBI) last week, and a final assessment, conducted via an external review, is expected by early April.

RBI’s Assurance and Stock Price Recovery

Following the steep decline, IndusInd Bank’s share price showed signs of recovery after the Reserve Bank of India (RBI) intervened, offering assurances about the bank’s financial stability. The central bank stated that IndusInd Bank remains ‘well-capitalised’ and that its financial position remains ‘satisfactory’ despite the discrepancy.

In a statement issued on March 15, 2025, the RBI clarified, “The Reserve Bank would like to state that the bank is well-capitalised and the financial position of the bank remains satisfactory.”

This announcement played a role in stabilising investor sentiment, leading to a slight rebound in the stock. By 18 March 2025, IndusInd Bank’s share price ended 0.60% higher at ₹681.45 on the National Stock Exchange (NSE).

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