Bank stock jumps 15% after promoter reassures investors about company’s financial stability

The shares of India’s fifth largest private sector bank that provides a range of banking and financial services, including wholesale banking, credit monitoring, risk management, tele-banking, investment banking, and commercial lending, made a sharp recovery by jumping 15 percent from the day’s low after the promoter’s reassurance. 

Price Action

The shares of IndusInd Bank Ltd, with a total market capitalization of Rs 53,719 Crores on Wednesday, hit a new 52-week low at Rs 606 per share. The shares, however, made a sharp recovery today and reached an Intraday high at Rs 694.7 per share, gaining around 14.6 percent from the day’s low. As of 1:00 pm, the shares were trading at Rs 689.5 per share, which was 5.12 percent higher than the previous close of Rs 655.95. 

What Happened 

On Monday, the bank informed its shareholders that an internal review of forex derivative transactions had revealed an accounting mismatch worth Rs 1,577 Crore (post-tax), which is about 2.35 percent of the bank’s net worth at the end of December 2024. 

This development came after an unexpected one-year extension of the CEO, Sumanth Kathpalia, instead of the three-year term that the board had wished for, which shook the investors’ confidence. As a result, on Tuesday, the shares of IndusInd Bank crashed 27 percent, recording its biggest single-day fall ever.  On Wednesday, however, the stock recovered sharply after the promoter Ashok Hinduja’s reassurance.

The promoter assured that the bank’s financials remain healthy and it will be fully supported if any capital requirement arises. The CEO, Sumant Kathpalia, said the bank will absorb the losses in the current quarter itself and expects Q4 to be profitable, with confidence in greater profitability from Q1FY26. 

Also read: Stock crashes over 9% after announcing ₹696 Cr investment in its healthcare subsidiary

Financials 

The Bank’s Net Interest Income declined 1 percent YoY from Rs 5,296 Crores in Q3FY24 to Rs 5,228 Crores in Q3FY25. Their PAT declined by 39 percent YoY from Rs 2,301 Crores to Rs 1,402 Crores over the same period.  The company’s Loans increased 12 percent YoY to Rs 3,66,889 Crores in Q3FY25, deposits grew 11 percent to Rs 4,09,438 Crores, and its CASA stood at Rs 1,42,818 Crores. 

About IndusInd Bank

The bank is engaged in providing various financial services and offers a wide range of products and services for individuals and corporates, including microfinance, personal loans, vehicle loans, credit cards, and SME loans. The Bank’s business lines include corporate banking, retail banking, treasury and foreign exchange, investment banking, capital markets, NRI/HNI banking, etc. 

Written By Adhvaitha Nayani 

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