Posted on May 16, 2025, by Niftynews
The IndusInd Bank share price nosedived nearly 6% on Friday following the lender’s admission of fresh accounting discrepancies totaling over ₹1,960 crore. The revelations, uncovered through internal audits and whistleblower reports, have shaken investor sentiment and prompted multiple brokerage downgrades.
The stock hit a low of ₹735.95 on the BSE, down 5.7% from the previous close, before recovering slightly to trade at ₹755.80 around 10:30 AM — still down 3.1% on the day.
📉 IndusInd Bank Share Price Under Pressure Amid Audit Shocks
The biggest blow to the IndusInd Bank share price came after the bank disclosed that its Internal Audit Department (IAD) had unearthed ₹674 crore of incorrectly recorded interest income across three quarters of FY25 in its microfinance business. These entries were reversed by January 10, 2025.
Moreover, another ₹595 crore in unsubstantiated balances was found in the “other assets” section. These had been matched against “other liabilities” in January, effectively masking the irregularities.
🕵️♀️ Whistleblower Complaint Triggers Deep Dive
The irregularities came to light following a whistleblower complaint, which led the Audit Committee of the Board to initiate a full-scale review of financial records. The IAD submitted its findings on May 8, 2025, confirming that the anomalies had occurred and involved major lapses in internal controls.
The bank, in its official communication, assured stakeholders that accountability will be fixed and corrective actions — including disciplinary steps against key personnel — are being taken.
💣 Previous Scandals Compound the Crisis
These aren’t the first cracks in the bank’s accounting armor.
In March 2025, IndusInd had disclosed derivative-related accounting errors estimated to impact 2.35% of its net worth as of December 2024. An external assessment by PwC pegged the cumulative financial misreporting at a staggering ₹1,979 crore as of June 30, 2024.
These persistent issues have now snowballed into a full-blown credibility crisis.
🚪 Leadership Shake-up: CEO and Deputy CEO Resign
Amid growing scrutiny, the bank’s CEO Sumant Kathpalia and Deputy CEO Arun Khurana resigned on April 29. In the interim, the board has appointed a Committee of Executives to oversee day-to-day operations while the search for a new MD & CEO is underway.
🕵️♂️ Grant Thornton Hired for Forensic Audit
To dig deeper into the rot, IndusInd Bank has now brought in Grant Thornton, a reputed global audit firm, to conduct a forensic audit of its financial statements. This comes in addition to the earlier review by PwC, signifying the bank’s intent to restore transparency — but it may take time to repair lost trust.
📉 Brokerages Downgrade IndusInd Bank Stock
The IndusInd Bank share price took further damage after major brokerages cut their ratings and target prices following the new revelations:
- CLSA downgraded the stock from ‘Outperform’ to ‘Hold’, slashing the price target to ₹780 from ₹900.
- Investec took a more bearish stance, reducing its target to ₹650 from ₹700 and downgrading the stock to ‘Sell’.
“IndusInd Bank has disclosed ₹1,960 crore of cumulative overreported income over 5–7 years. Assuming 25% of this happened in FY24, another 10 basis points of NIM is structurally lost,” noted Investec.
📊 Key Timeline of Events Affecting IndusInd Bank Share Price
| Date | Event Description |
|---|---|
| March 2025 | Derivative accounting errors disclosed |
| April 29, 2025 | CEO and Deputy CEO resign |
| May 8, 2025 | IAD submits report uncovering ₹674 Cr interest misreporting |
| May 2025 | ₹595 Cr unsubstantiated balances found in other accounts |
| Ongoing | Forensic audit underway by Grant Thornton |
📌 What This Means for Investors
The IndusInd Bank share price may continue to face volatility and downward pressure in the short term due to:
- Loss of investor trust
- Leadership uncertainty
- Lingering impact of financial misstatements
- Possible regulatory scrutiny
For long-term investors, the real question will be whether the bank can reinforce its governance structure and rebuild credibility through transparent disclosures and concrete reforms.
🔍 Final Thoughts: IndusInd Bank at a Crossroads
The IndusInd Bank share price crash is not just a reaction to a few numbers gone wrong. It reflects a broader concern about internal checks and balances, executive oversight, and financial integrity.
Unless swift corrective measures are taken — and confidence is restored — the stock may remain under pressure. But if the bank successfully navigates this turbulence, addresses governance issues, and improves its financial reporting standards, it could bounce back in the long term.
