IndusInd Bank, one of India’s prominent private lenders, has been under the spotlight due to a series of financial discrepancies. In March 2025, the bank disclosed accounting lapses in its forex derivatives portfolio, leading to a significant hit on its net worth. Now, a new issue has emerged: a ₹600 crore discrepancy in its microfinance portfolio, prompting the bank to initiate a second forensic audit.​
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The latest development: EY’s forensic audit
On April 22, 2025, IndusInd Bank’s shares fell by 6.3%, closing at ₹776.15 on the BSE. This decline followed the bank’s announcement of appointing Ernst & Young (EY) to conduct a forensic audit into the ₹600 crore discrepancy related to accrued interest income in its microfinance portfolio.
This issue was flagged during the statutory audit for the financial year ending March 2025, leading to an additional communication under Section 143(12) of the Companies Act, which mandates reporting of suspected fraud. ​
EY’s mandate includes investigating potential operational lapses, identifying any instances of fraud, and establishing accountability. This audit is in addition to the ongoing forensic review by Grant Thornton Bharat into irregularities in the bank’s forex derivatives portfolio. ​
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Financial impact: A closer look at the numbers
The bank’s financial metrics have been under pressure due to these discrepancies:​
| Metric | Value |
| PE Ratio (x) | 8.46 |
| EPS – TTM | ₹93.11 |
| Market Capitalisation (₹ Cr.) | 61,654.37 |
| MCap Rank | 13 |
| PB Ratio (x) | 1.02 |
| Dividend Yield (%) | 2.09 |
| Face Value (₹) | 10.00 |
| Beta | 1.55 |
| 52-Week High/Low (₹) | 1,550 / 606 |
In April 2025, an external audit by PwC estimated potential post-tax losses of ₹1,979 crore due to the derivatives discrepancy, equating to a 2.27% hit on the bank’s net worth as of December 2024. This was higher than the initial estimate of ₹1,600 crore.​
Market reaction: Investor sentiment and stock performance
The bank’s stock has experienced significant volatility:​
- March 10, 2025: Disclosure of forex derivatives discrepancies leads to a 27% single-day stock crash.
- April 22, 2025: Announcement of EY’s forensic audit into microfinance discrepancy causes a 6.3% drop in share price.
Over the past year, IndusInd Bank’s shares have declined by 46%. Despite a 16.6% gain in the past month, the stock remains under pressure, trading below key simple moving averages. The 14-day Relative Strength Index stands at 62.2, indicating the stock is neither overbought nor oversold. ​
Leadership changes:
In response to these challenges, IndusInd Bank appointed Santosh Kumar as Deputy Chief Financial Officer in April 2025. He replaces interim CFO Arun Khurana, who had been overseeing treasury operations. This move aims to bolster the bank’s financial oversight amid ongoing audits and regulatory scrutiny. ​
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Conclusion:Â
IndusInd Bank’s recent financial discrepancies have raised concerns about its governance and risk management practices. The initiation of a second forensic audit by EY into the ₹600 crore microfinance discrepancy underscores the bank’s commitment to transparency and accountability. However, the outcomes of these audits will be crucial in restoring investor confidence and determining the bank’s financial trajectory.​
Investors and stakeholders should closely monitor the findings of the ongoing audits and the bank’s subsequent actions to address any identified issues. A proactive approach in strengthening internal controls and governance structures will be key to navigating through this period of financial turbulence.​
