IndusInd Bank is currently under intense scrutiny as its stock price takes a hit, dropping by 3% in early trading. The bank is facing ongoing challenges, particularly following the abrupt resignation of its Managing Director and CEO, Sumant Kathpalia, just one day after the Deputy MD also exited the bank. In light of these changes, IndusInd has established a "Committee of Executives" to manage operations until a new CEO is appointed.

IndusInd Bank Stock Performance

The share price of IndusInd Bank has experienced a 22% increase over the past month, rebounding somewhat after a significant decline linked to recent accounting issues. Despite this recovery, the stock remains down over 13% for the year thus far. Notably, the shares rose 5.4% in the last five trading days and have shown an impressive 23% gain over the previous month. However, over the last six months, the stock has plummeted 21%, resulting in a staggering 45% loss of investor wealth over the past year.

• Recent Stock Trends:
  • +5.4% in the last five trading days
  • +22% in the past month
  • -21% over the last six months
  • -45% in the past year

Timeline of Events at IndusInd Bank

The turmoil at IndusInd Bank began on April 29, when CEO Sumant Kathalia tendered his resignation. In his letter, he cited the ongoing discussions regarding derivatives and accepted moral responsibility for the lapses that had come to light. He stated, "I wish to submit my resignation from the services of the Bank in relation to the ongoing Derivatives discussion… I would request that my resignation be taken on record at the close of working hours today."

Following this, the bank announced the formation of a Committee of Executives to oversee its operations, under guidance from the Oversight Committee of the Board, until a new MD & CEO is appointed or a maximum of three months elapses.

Accounting Issues Plaguing IndusInd Bank

The recent leadership changes have coincided with revelations of accounting discrepancies involving derivatives, primarily used to manage foreign currency deposits and borrowings. The bank estimates that these issues could lead to a 2.35% reduction in its net worth, amounting to approximately ₹2,100 crores.

In terms of financial performance, IndusInd Bank reported a 39% decline in net profit for Q3 FY25, with earnings falling to ₹1,402 crores compared to ₹2,298 crores in the same quarter the previous year. Meanwhile, the bank’s net interest income for Q3 FY25 reached ₹12,801 crores, reflecting an 11% increase from ₹11,572 crores in the same quarter last year.

In summary, IndusInd Bank’s recent challenges, including leadership changes and accounting discrepancies, have significantly impacted its stock performance and investor confidence. Stakeholders will be keenly watching how the newly formed committee navigates these turbulent waters while awaiting the appointment of a new CEO.