IndusInd Bank Shares Down 6%; Lender Appoints EY to Investigate ₹600 crore irregularity

Shares of IndusInd Bank fell by 6.3% to ₹776.15 on the BSE on April 22, Tuesday, after the company appointed EY to investigate a ₹600 crore irregularity in its microfinance portfolio. This raised concerns about governance standards and accounting issues.

The bank invited EY to investigate the matter after statutory auditors identified the matter while reviewing financial statements of FY25. The bank submitted supplementary communication under Section 143(12) of the Companies Act, which requires reporting of potential fraudulent activities.

However, the investigation is different from the current forensic audit being conducted by Grant Thornton Bharat regarding irregularities in the bank's forex derivatives operations.

“It is not an issue that spans multiple years. It seems to have occurred in the last financial year, possibly within the second and third quarter of the fiscal,” a source close to the development told ET. “But EY will investigate if there was any fraud committed.”

A source told ET that the bank's board had to dial EY due to timing pressures, as Grant Thornton's findings are due by April's end.

Previous disclosures have negatively affected investor confidence. IndusInd's exchange filing on April 15 revealed that PwC's review of the derivatives portfolio indicated potential post-tax losses of ₹1,979 crore, exceeding the initial ₹1,600 crore projection. Sources indicate that PwC's report contained substantial disclaimers.

Previous disclosures have dampened investor confidence. As per an exchange filing on April 15 PwC's review of the derivatives portfolio indicated potential post-tax losses of ₹1,979 crore, which exceeded ₹1,600 crore projection.

Notably, IndusInd Bank shares have fallen by 46% over the past year. Despite reporting 16.6% increase in the last month, the shares faced downward pressure, trading below four crucial simple moving averages: the 50-day, 100-day, 150-day, and 200-day SMAs.