Bank stock jumps 5% after RBI’s reassurance on its financial stability

During Monday’s trading session, the shares of a private sector bank offering microfinance, personal loans, advanced digital banking facilities, and other financial services surged nearly 5.3 percent on BSE, after the Reserve Bank of India (RBI) issued a statement on the bank.

Price Movement

With a market cap of Rs. 54,144.3 crores, at 10:18 a.m., the shares of IndusInd Bank Limited were trading in the green at Rs. 695, up by around 3.4 percent, as compared to its previous closing price of Rs. 672.1.

The stock has delivered negative returns of nearly 53 percent over a one-year period, as well as over 33 percent returns in the last one month.

What’s the news

According to the latest exchange filings, the Reserve Bank has affirmed that the bank is well-capitalized, with a stable and satisfactory financial position.

As per the auditor-reviewed bank’s financial results for the quarter ended 31st December 2024, IndusInd Bank has maintained a comfortable Capital Adequacy Ratio of 16.46 percent and a Provision Coverage Ratio (PCR) of 70.2 percent. 

As of 9th March 2025, the bank’s Liquidity Coverage Ratio (LCR) stood at 113 percent, as against the regulatory requirement of 100 percent. 

Based on publicly available disclosures, the bank has proactively engaged an external audit team to conduct a comprehensive review of its current systems, ensuring a thorough assessment and swift resolution of any financial impact.

RBI has instructed the Board and management to complete all necessary remedial measures within the ongoing quarter (Q4 FY25) while ensuring full disclosure to all stakeholders. In light of this, depositors are advised not to be influenced by speculative reports. The bank’s financial health remains strong and continues to be closely monitored by RBI.

Mutual Funds Sell Offs

According to the Mutual Fund Insight report by Nuvama Alternative & Quantitative Research, mutual funds (MFs) offloaded around 1.6 crore shares of IndusInd Bank before its stock crash. The total mutual fund holdings in the bank stood at around 20.7 crore shares in February 2025, down from 22.3 crore shares in January.

India’s MFs sold IndusInd Bank shares worth Rs. 1,600 crores in February 2025, just a month before an accounting discrepancy surfaced. This revelation led to the stock experiencing its biggest single-day decline on record.

The crash followed multiple brokerage downgrades and significant target price cuts, triggered by concerns over discrepancies in its forex derivatives portfolio.

Also read: Infra stock with revenue growth guidance of over 25% for FY26 to keep on your radar

Among the major mutual funds that reduced their stakes in IndusInd Bank

• Kotak Mutual Fund sold shares worth Rs. 510 crore
• Motilal Oswal Mutual Fund offloaded shares worth Rs. 126 crore
• Tata Mutual Fund also divested shares worth Rs. 126 crore
• PPFAS Mutual Fund sold shares worth Rs. 29 crore

While these funds were sellers, Quant Mutual Fund was a buyer of the stock, purchasing IndusInd Bank shares worth Rs. 305 crore in February, according to the report.

As per sources, data from ACE MF indicates that as of February 28, 2025, mutual funds collectively held ~20.08 crore shares of IndusInd Bank, with a total market value of Rs. 19,884 crores.

Top Executives Sell Offs

The top executives of IndusInd Bank, CEO Sumant Kathpalia and Deputy CEO Arun Khurana, collectively sold shares worth Rs. 157 crore between 2023 and 2024.

Sources indicate that Kathpalia sold nearly 9.5 lakh shares, valued at Rs. 134 crore, between May 24, 2023, and June 25, 2024, while purchasing 3.96 lakh shares worth Rs. 34 crore. Likewise, Khurana offloaded 5.5 lakh shares for Rs. 82 crore between 2023 & 2024 and acquired 2.38 lakh shares worth Rs. 25 crore.

The private lender has been in the news after announcing a 2.4 percent impact on its net worth due to changes in the valuation of derivatives transactions. This revelation triggered multiple stock downgrades, coming shortly after the RBI granted CEO Kathpalia a 1-year extension, rejecting his request for a 3-year renewal.

Financial Performance

IndusInd Bank reported a marginal decline in net interest income (NII), experiencing a year-on-year decrease of nearly 1.3 percent, falling from Rs. 5,295.6 crores in Q3 FY24 to Rs. 5,228 crores in Q3 FY25.

Similarly, during the same period, the bank’s net profit decreased from Rs. 2,301.4 crores to Rs. 1,402.3 crores, representing a significant growth of around 39 percent YoY.

About the Bank

IndusInd Bank Limited is engaged in the business of providing a wide range of banking products and financial services to corporate and retail clients besides undertaking treasury operations.

Written by Shivani Singh

Disclaimer

The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.

The post Bank stock jumps 5% after RBI’s reassurance on its financial stability appeared first on Trade Brains.