On Tuesday, IndusInd Bank share price saw a steep fall of 22%, taking it to a four-year low. This was its sharpest single-day drop since March 2020, sparking immediate buzz in the markets and on every financial news platform.
The reason? A surprise accounting discrepancy related to past forex derivative transactions, which the bank said could cause a one-time hit to earnings in the coming quarters. The bank flagged this issue in a regulatory filing late on Monday, and within hours, markets responded.
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What exactly did the bank reveal?
Let’s break it down. IndusInd Bank’s internal review showed an underestimation of hedging costs for certain old forex transactions. As a result, the bank expects a 2.35% reduction in its net worth as of December 2024.
Here’s what the numbers look like:
| Metric | Details |
| One-time net worth impact | 2.35% |
| Monetary hit | ₹1,600 crore – ₹2,000 crore |
| USD equivalent (at $1 = ₹87.31) | $171 million – $229 million |
| New share price low (52-week) | ₹720.35 |
| Market capitalisation (post-fall) | ₹70,161 crore |
| Share decline since Oct 2023 | 46% |
This one-time impact is expected to be reflected in either Q4 FY2024 or Q1 FY2025 results, as per the bank’s management.
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What triggered the review in the first place?
Interestingly, this wasn’t discovered randomly. The review was initiated following the Reserve Bank of India’s updated guidelines on investment portfolios, applicable from April 1, 2024.
As per the bank, this internal audit looked into its “Other Asset and Other Liability” accounts, where the discrepancies were found. To add another layer of assurance, IndusInd Bank has hired an external agency to validate the findings. The final report is still awaited.
Analysts reaction
The sharp fall in IndusInd bank share price naturally got analysts talking. While many still hold a ‘buy’ rating, the tone has turned cautious.
Key reactions include:
- Jefferies called out “weak internal controls” and hinted that such disclosures could lead to a stock derating.
- Nuvama downgraded the stock to ‘reduce’, stating that derivative-related shocks could be more worrying than bad loans.
- Out of 38 analysts, four have now issued ‘sell’ ratings — the highest in the past two years.
What about the bank’s financial performance?
Even before this accounting gap came into the picture, IndusInd Bank’s earnings were not in the best shape. The Q3 results for FY2024 showed:
| Performance Metric | Q3FY24 | Previous Period |
| Standalone Net Profit | ₹1,401 crore | ₹2,298 crore (Q3 last year) |
| Net Interest Income (NII) | ₹5,228 crore | ₹5,296 crore |
| Net Interest Margin (NIM) | 3.93% | 4.29% in Q3FY23; 4.08% in Q2FY24 |
The bank’s management did state that it remains profitable and has sufficient capital adequacy to absorb this hit. But from a shareholder’s perspective, such disclosures hurt trust — especially when they stem from past years and weak controls.
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A closer look at share performance
Here’s how the Indusind bank share has played out in numbers:
| Period | Change in Share Price |
| Single-day fall (Tuesday) | -22% |
| From last earnings miss (Oct) | -46% |
| Past 12 months | -42% |
| Past 5 years | -1% |
| Nifty 50 performance (same period) | -8% |
| Bank index performance | -7% |
Clearly, the IndusInd bank share price has taken a bigger hit compared to broader indices.
What’s next for investors?
The coming weeks will be crucial. The market is now waiting for:
- The external audit report.
- The actual impact in Q4 FY2024 or Q1 FY2025 results.
- Further clarity on internal reforms and control systems.
- Direction from the RBI, if any.
The bank also finds itself in a leadership transition phase — with CEO Sumant Kathpalia receiving a shorter-than-requested extension, which adds to the cloud of uncertainty.
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Should you be worried if you hold the stock?
Well, here’s the thing — the numbers hurt, but this doesn’t mean the bank is in trouble fundamentally. However, it does reflect poor internal oversight, and that affects investor sentiment, which can take time to recover.
If you’re a long-term investor, it’s worth watching how the bank handles this — whether it owns the problem, corrects its controls, and brings in more transparency. But if you’re a short-term trader, you might want to wait and watch before re-entering.
Final thoughts
This isn’t the first time a stock has been punished for an internal misstep, and it won’t be the last. But the IndusInd bank share analysis makes one thing clear — in finance, even a small accounting gap can snowball into a major crisis of confidence.
As always, numbers tell the story. But how a company responds to those numbers — that’s what defines investor trust.
