• Source:JND

IndusInd Bank shares tumbled over 20 per cent to hit lower circuit in the early trading hours on March 11 after it reported a decline in its derivatives portfolio, which would eventually drag down its net worth.IndusInd Bank share price hit a 52-week low of Rs 720.50 on the BSE. 

IndusInd Bank stock fell 22.8 per cent to Rs 695.25 per share on the BSE, its 52-week low. The company's stock fell 21.67 per cent to Rs 705.35 on the National Stock Exchange (NSE).

IndusInd Bank, the country's fifth largest private sector bank, has projected a 2.35% erosion in its net worth by December 2024 due to anomalies in its derivatives trades, which are not in line with the norms implemented by the Reserve Bank of India from April 2024.

The massive fall led to a decline of about Rs 14,000 crore in the market value of the bank. The stock touched a 52-week low of Rs 720.35 on the NSE, falling below the lower band. The bank's total assets are expected to fall by about Rs 2,100 crore after an internal review found accounting discrepancies of 2.35 per cent in the bank's derivatives portfolio.

In a regulatory filing on Monday, IndusInd Bank said that during an internal review of processes relating to its derivatives portfolio, it identified certain anomalies in the account balances.

A detailed internal review of Mumbai-based IndusInd Bank has estimated a negative impact of about 2.35 per cent on the bank's net worth by December 2024. The company gave this information in a statement.

The review was done following RBI directions issued in September 2023 on lenders' investment portfolios, concerning the portfolio's 'other assets and other liabilities' accounts.

According to experts, this will add Rs 100 crore to IndusInd Bank's net worth. The impact is likely to be Rs 1,500 crore.

Following this disclosure, IndusInd Bank held an analyst meet and said that an external auditor is reviewing the matter and a report is expected by the end of March 2024. IndusInd Bank, however, clarified that profitability and capital adequacy are healthy enough to absorb this one-time impact.

Shares of IndusInd Bank on Monday fell nearly 4 per cent after the Reserve Bank of India (RBI) said the private sector lender will extend the tenure of its current CEO by one year instead of the three years sought by the bank.

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