IndusInd Bank shares experienced a significant drop of over 6% in early trading on Tuesday, following reports of a new forensic audit aimed at investigating a ₹600 crore discrepancy in its microfinance sector. The stock plummeted to ₹776.15 per share on the Bombay Stock Exchange (BSE), raising concerns among investors about the bank’s financial practices.
Forensic Audit Initiated
According to insights from The Economic Times, IndusInd Bank has engaged Ernst & Young (EY) to carry out this audit after irregularities related to interest income accrual were uncovered during the ongoing statutory audit for the previous financial year. The auditors have communicated their findings under Section 143(12) of the Companies Act, 2013, which necessitated the bank’s decision to conduct a more thorough investigation.
- Key points:
- The audit by EY is a response to detected discrepancies.
- Ongoing forensic scrutiny is also being conducted by Grant Thornton Bharat (GTB) regarding the bank’s forex derivatives.
Timeline and Background
Sources indicate that the discrepancy likely emerged during the second or third quarter of the last fiscal year and is not expected to affect multiple years. EY’s role will be to ascertain whether any fraudulent activities took place and to pinpoint those responsible. A bank insider mentioned that time constraints were a significant factor in hiring EY, especially since GTB’s review is anticipated to conclude by the end of April.
Derivatives Portfolio Concerns
Previously, on March 10, 2025, IndusInd Bank acknowledged the existence of discrepancies in the balances of its derivatives portfolio. Following an internal assessment, the bank estimated a post-tax adverse effect of around 2.35% on its net worth as of December 2024. An external audit by PwC revealed a negative impact of ₹1,979 crore, which translates to a post-tax hit of 2.27%, slightly lower than the Reserve Bank of India’s (RBI) estimate of approximately ₹2,000 crore.
Stock Performance Overview
Despite a recent uptick of 17% in share price over the past month, IndusInd Bank has faced challenges, with its stock down by 17% year-to-date. Over the past six months, shares have decreased by 37%, and a year-over-year analysis shows a decline of 45%. As of 9:45 AM, shares were trading at ₹802.35, reflecting a 3.10% decrease.
Conclusion
IndusInd Bank’s recent developments highlight the ongoing challenges within its financial framework, underscoring the importance of transparency and accountability. Investors and stakeholders are keenly observing how these audits will unfold and their implications for the bank’s future stability. For more updates on banking sector trends and stock performance, stay tuned.
