IndusInd Bank Shares Drop 23%, Fall below ₹700 – Lowest since Nov 2020; ₹2,100 Crore Q4 Impact Expected

The development of accounting discrepancies could be the reason behind RBI's recent decision to extend the IndusInd Bank CEO's tenure to only one year instead of three as is desired.

IndusInd Bank stock reached an all-time low of 695.25 on BSE which was down 23 percent. This is the IndusInd Bank stock price last traded at in November of. The bank stated that it wanted to provide a best-case estimation of the impact this is why the difference was not discussed in the Q3FY25 earnings conference. It was suggested it is possible that RBI has been aware of this issue Nuvama pointed out.

To be reminded the situation, the CFO of IndusInd Bank Gobind Jain resigned shortly before the Q3FY25's earnings. RBI then appointed CEO and Director Sumant Kathpalia for one year only.

The latest incident had an impact on the RBI's decision to extend the term of MD & CEO just for one year, PL Capital claimed.

"Prima-facie the P&L would be hit by Rs 2,100 crore (pre-tax), mainly effected in interest expense while the remaining would be adjusted against trading income although an exact split has not been given. As per the bank, this irregularity would not impact the overall growth and business prospects," PL Capital declared.

Kotak Institutional Equities said the impact on the financials is not significant but it raises the issue of credibility in general. Rebuilding the credibility that was lost will likely be more than just a few quarters, according to the report.

MOFSL has lowered its IndusInd Bank share price Rs 925 and ICICI Securities has set a goal of Rs 85. Kotak Institutional Equities has lowered its IndusInd Bank target in the company to 850, down from $1400 in the past and it has downgraded its rating from 'Buy to Reduce. The target for PL Capital is the 1,000 rupees. Nuvama estimates the price at Rs 750. Nirmal Bang has put it at 900 rupees.