IndusInd Bank Ltd's shares fell 8% in Wednesday's trade and were on the verge of falling below Rs 600 before recovering completely. The stock rose after promoter Ashok Hinduja reportedly told shareholders not to panic, assuring them that the bank would provide liquidity support if necessary.
The stock also recovered after CEO Sumant Kathpalia reportedly stated that his bank was looking to offset losses incurred due to accounting discrepancies in valuations of previous derivatives transactions in the March quarter. He predicted that both the fourth quarter and the full year would be profitable. The RBI recently extended Kathpalia's tenure as CEO by one year rather than the three years sought by the bank.
On Wednesday, IndusInd Bank's stock fell 7.70 percent to a low of Rs 605.40 before reversing its losses. It was later trading at Rs 661.65, up 0.87%. The banking stock has fallen for five consecutive sessions. It is down 32.20 percent in 2025 so far, and 57.11 percent in the previous year.
The stock had seen fresh selling after the bank reported an accounting discrepancy, but management insisted that the problem was identified by the IndusInd Bank management rather than the auditor or the regulator.
Ashok Hinduja stated that the promoters were awaiting RBI approval to increase their stake in the bank from 15% to 26%, and that once the lender received RBI approval, it would immediately inject capital into the bank.
Following recent developments, the stock has seen a surge in downgrades. Kotak Institutional Equities reduced its target price for the stock to Rs 850 from Rs 1,400 previously, while downgrading it to 'Reduce' from 'Buy'. MOFSL suggested a revised target price of Rs.925. ICICI Securities recommended a target price of Rs 850. Nuvama rates the stock at Rs 750, while Nirmal Bang values it at Rs 900. PL Capital values the stock at Rs 1,000. The stock reached its lowest point at Rs 720.50. At this price, it has dropped 53% in the past year.
