Jobaaj Stories
IndusInd Bank News: Stock Plunges After Derivatives Discrepancy
IndusInd Bank's shares experienced a dramatic 27% tumble on March 11, 2025, following the disclosure of significant discrepancies in its derivatives portfolio. This revelation, impacting an estimated 2.35% of the bank's net worth, sent shockwaves through the market and significantly impacted mutual fund holdings.
Mutual Funds Heavily Affected
As of February 28th, 2025, over 50 mutual funds held a substantial stake in IndusInd Bank, valued at approximately ₹22,339 crore. The subsequent share price crash eroded a significant portion of this investment, resulting in losses of around ₹7,339 crore in just a few days. UTI Mutual Fund, Bandhan Mutual Fund, and several others were among the most exposed.
The Discrepancy and its Impact
The issue stems from an internal review prompted by the Reserve Bank of India (RBI), revealing a ₹1,580 crore discrepancy in the bank's derivatives portfolio. While the bank's management, including Chairman Ashok Hinduja, downplayed the incident as “routine,” the market reacted negatively. The resulting sell-off wiped out nearly ₹18,000 crore from the bank's market capitalization, pushing the share price to its lowest level since November 2020. This comes on the heels of other recent challenges including a technical glitch in 2021 and the CEO receiving only a one-year term extension from the RBI.
Promoter's Response and Market Sentiment
While Ashok Hinduja assured investors of the bank's financial strength and the promoters' readiness to inject capital if needed, the market remains cautious. Several brokerages have downgraded the stock citing governance concerns and the need for credibility restoration. The sharp decline reflects growing apprehension regarding leadership, internal controls, and the bank's overall risk management.
Looking Ahead
The IndusInd Bank situation highlights the importance of transparency and robust risk management in the banking sector. The long-term impact of this incident remains to be seen, but the immediate fallout has undoubtedly shaken investor confidence. The next few months will be crucial in determining the bank's ability to regain trust and stabilize its market position. Stay tuned for further updates.
