IndusInd Bank shares rally 13% in 2 sessions; key details you need to know

On March 10, the internal review by the bank had estimated an adverse impact of approximately 2.35% of its net worth as of December 2024.

At 11:48 AM, shares of the bank were trading 5.52% higher at ₹776.50 on the National Stock Exchange.

However, shares of the bank have tanked 14.2% since March 11, a day after it first reported the discrepancies.

1. IndusInd Bank on Tuesday, April 15, received a report from the external agency it had hired to review the internal findings.

The external agency report has found discrepancies related to derivative deals. The report has quantified the negative impact of the above as of June 30, 2024, at ₹1,979 crore. Based on the report, the bank said it has assessed an adverse impact (on a post-tax basis) of 2.27% to the bank’s net worth as of December 2024 on account of these discrepancies.

2. The bank had appointed external agency PwC to assess the impact on the bank's balance sheet and lapses at various levels and suggest remedial action. “The bank will appropriately reflect the resultant impact in the financial statements for 2024-25 and continue to take suitable steps to augment the internal controls relating to the derivative accounting operations,” it said.

3. IndusInd Bank's board has also hired Grant Thornton to conduct a forensic audit into accounting lapses.

As per the mandate, Grant Thornton would conduct a comprehensive investigation to identify the root cause of the discrepancies and assess the correctness and impact of the accounting treatment of the derivative contracts with regard to the prevailing accounting standards.

Additionally, the firm would identify any lapses and establish accountability with regard to discrepancies in accounting.

4. Soon after the disclosure by the bank, IndusInd International Holdings Ltd (IIHL) — the Mauritius-based promoters of the private sector lender — has committed to infuse capital into the bank in case there is a requirement.

IIHL, the investment arm of Hinduja Group, has recently got RBI's in-principal nod to raise its stake in IndusInd Bank from 16% to 26%.

5. According to reports, promoter shareholding in the bank saw a marginal fall in the fourth quarter (January-March), as per the latest shareholding pattern updated on the Bombay Stock Exchange. However, retail shareholding has seen growth.

6. IndusInd Bank had reported a 39% year-on-year (YoY) decline in its standalone net profit to ₹1,402.3 crore in the third quarter ending December 31, 2024, compared to ₹2,301 crore in the year-ago period.

The drop in the bank’s net profit comes on the back of a fall in its asset quality as Gross Non-Performing Assets (GNPAs) increased while the capital adequacy ratio decreased.

The bank’s Net Interest Income (NII) also fell by 1.28% YoY to stand at ₹5,228.1 crore, compared to ₹5,295.6 crore in the third quarter of the financial year 2024-25.

7. Reserve Bank of India Governor Sanjay Malhotra last week had described the accounting lapses at IndusInd Bank and the restrictions on New India Cooperative Bank as "episodes” and not "failures".

"These are not even failures, they’re episodes. In such a large system with so many entities these things will happen again," Malhotra had said, adding “the banking system remains safe, secure, and robust at a systemic level.