IndusInd Bank’s stock witnessed a notable surge of over 5% during early trading on Monday, following a reassuring statement from the Reserve Bank of India (RBI). The central bank confirmed that the private lender is "well-capitalised" and maintains a "satisfactory" financial condition. This announcement helped the share price climb as high as ₹707.00 on the BSE.

RBI Reassures Investors

In a statement released on March 15, the RBI emphasized the bank’s robust capital status and satisfactory financial health. This came after the RBI instructed IndusInd Bank’s board to address an estimated ₹2,100 crore accounting discrepancy within the current month. Last week, the bank acknowledged an accounting error impacting approximately 2.35% of its net worth, leading to a swift correction in its share price.

• Key points from the RBI statement:
  • IndusInd Bank has a Capital Adequacy Ratio of 16.46%.
  • The bank’s Provision Coverage Ratio stands at 70.20%.
  • As of March 9, 2025, the Liquidity Coverage Ratio (LCR) was recorded at 113%, surpassing the regulatory minimum of 100%.

The RBI also noted that IndusInd Bank has engaged an external audit team to thoroughly review its systems and assess the actual implications of the accounting discrepancy.

No Cause for Alarm

The banking regulator reassured customers that there is no immediate need for depositors to be concerned about speculative reports. It confirmed that IndusInd Bank continues to maintain a stable financial footing, which is under close observation.

• The RBI’s advice for depositors:
  • Remain calm amid speculation.
  • Trust in the bank’s ongoing stability and monitoring.

Recent Developments: HDFC Mutual Fund Increases Stake

In a stock exchange update on March 13, IndusInd Bank revealed that HDFC Mutual Fund had raised its stake in the bank to 5.02% as of March 11, 2025. Prior to this increase, HDFC had held a 4.82% stake. This adjustment came after acquiring an additional 15,92,410 shares on the open market.

Market Analysis: Should You Invest in IndusInd Bank?

The stock of IndusInd Bank has shown significant volatility, experiencing a steep decline of over 28% last week. Analysts like Anshul Jain, Head of Research at Lakshmishree Investment and Securities, observed a rebound after the stock hit a critical support level at ₹611, resulting in a 19% recovery with trading volume surging by 1,351% compared to the 50-day average.

• Outlook and Recommendations:
  • Jain indicated potential short-term gains up to ₹740.
  • However, he cautioned that the overall market sentiment remains bearish, with downside risks still present.
  • Traders are advised to exercise caution due to the ongoing volatility in the stock.

As of 9:20 AM, IndusInd Bank shares were trading at ₹691.40, reflecting a 2.87% increase.

In summary, while the recent developments in IndusInd Bank’s financial narrative may offer opportunities, investors should approach with vigilance and assess market conditions carefully.