Bloodbath for IndusInd: Shares Sink 27%, Brokerages Predict 33% More Pain Ahead
Tuesday (March 11) was the worst day for IndusInd Bank stock. IndusInd Bank stock today recorded a massive decline of 27%. IndusInd Bank is a leading private bank in India. The massive decline of 25% in the stock of IndusInd Bank today created panic in the market.
IndusInd Bank stock had fallen over 28% during intraday trading to a 52-week low of Rs 649.
By the close of trading, IndusInd Bank stock was trading 27.11 percent lower at Rs 655.95.
Why did Indusind Bank stock fall 27%?
IndusInd Bank disclosed that an internal review had detected certain discrepancies in its derivative accounts.
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| INDUSIND BANK |
IndusInd Bank said that due to these discrepancies in the accounts, the bank may suffer a total loss of Rs, 1577 crore. This amount could be 2.35% of the total net worth of IndusInd Bank.
Which brokerage houses have downgraded IndusInd Bank Stock?
Many brokerage houses, including Nuvama, ICICI Securities, and Motilal Oswal, downgraded the bank’s rating and reduced the target price by about 33% after this news came out.
What information did IndusInd Bank give to its shareholders?
IndusInd Bank, India’s fifth largest private bank, on Monday (March 10) told its shareholders that its total net worth may decline by 2.35% by December 2025.
Mumbai-based IndusInd Bank said the impact on net worth was due to internal derivative trades that were not in compliance with Reserve Bank of India (RBI) regulations effective from April 2024.
Brokerage firm Nuvama’s investment opinion on Indusind Bank Share
One by one, all the brokerage houses have reduced the rating and price target on IndusInd Bank shares.
First, brokerage firm Nuvama has reduced the rating of IndusInd Bank shares from “hold” to “reduce” and has reduced the target price from₹1,115 to₹750.
The brokerage firm also said that the continuous negative events have had a very bad effect on the bank’s credibility. Investors’ confidence in the bank and its management has also decreased.
Because of this situation, we have taken a negative stance on IndusInd Bank shares.
Brokerage firm ICICI Securities investment opinion on Indusind Bank Share
ICICI Securities recently downgraded Indusind Bank’s rating to ‘Reduce’ and has retained it for the time being. The brokerage house said that our target price remains ₹ 850, based on ~0.9x valuation of FY26E ABV.
Brokerage firm Motilal Oswal investment opinion on Indusind Bank Share
Motilal Oswal has downgraded Indusind Bank stock to neutral. The brokerage has revised the target price of the stock to ₹ 925 for the next 12 months. The brokerage expects a 3% upside in the stock.
Brokerage firm Prbhudas Liladhar investment opinion on Indusind Bank Share
Brokerage firm Prabhudas Lilladher has downgraded Indusind Bank’s rating from ‘Buy’ to ‘Hold’ and cut the target price from ₹ 1,400 to ₹ 1,000.
The Crisis Deepens on IndusInd Bank
IndusInd Bank is already facing a lot of problems. These include the continued slowdown in the microfinance sector, the resignation of the CFO before the December quarter results, the extension of the CEO term by only one year instead of three years, and now the potential impact on the net worth due to discrepancies in the derivatives portfolio.
Technical Analysis on Indusind Bank Stock
IndusInd Bank stock has formed a long red marubozu candle in the daily time frame. A significant jump in volume has also been observed. IndusInd Bank opened at Rs 810 today, down 90 rupees from yesterday. (See Chart)
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| Technical View on IndusInd Bank Stock |
Even after opening at Rs 90 below, IndusInd Bank stock did not stop here, but it experienced more selling pressure. No recovery was seen from any level.
Two big gaps have formed on the IndusInd Bank share chart now. One gap was formed on 25 October 2024 when the price opened directly at 1163 from 1280. The reason for this gap down was the poor quarterly results of IndusInd Bank.
(I have marked both the gaps on the chart; please look carefully.).
IndusInd Bank stock is moving towards the level of COVID-19; this level is Rs 242.
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| IndusInd Bank stock |
It remains to be seen when and how much recovery will come in IndusInd Bank’s stock
Statement by IndusInd Bank promoter Ashok Hinduja
IndusInd Bank promoter Ashok Hinduja has assured us that if more capital is needed, we will infuse it into the bank.
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| Ashok Hinduja |
Ashoka Hinduja advised investors not to panic and said that the promoters have full faith in the management of IndusInd Bank.
IndusInd Bank promoter Ashok Hinduja, while talking to the media, said that the bank has faced many problems in the past and the bank is capable of handling this problem as well.
Ashok Hinduja said that the promoters of Indusind Bank want to increase their stake in the bank from 15% to 26%. For this, they need RBI’s approval. As soon as we get the approval from RBI, we will infuse capital into the bank with immediate effect.
FAQ
How much did IndusInd Bank’s stock fall today?
IndusInd Bank’s stock fell 27% today
What was the intraday low of IndusInd Bank stock?
The intraday low of IndusInd Bank stock was Rs. 649 today
Why was there a huge sell-off in IndusInd Bank stock today?
IndusInd Bank disclosed that an internal review had detected certain discrepancies in its derivative accounts.
Who is the promoter of IndusInd Bank?
The promoter of IndusInd Bank is Ashok Hinduja, owner of Hinduja Group.
What did IndusInd Bank’s promoter Ashok Hinduja say in the press conference?
IndusInd Bank’s promoter, Ashok Hinduja, said in the press conference that he has full faith in the bank’s management and that this problem will be resolved very soon. He also assured to infuse more capital in the bank if needed.
How much loss is Indusind Bank expected to incur due to this derivative discrepancy?
IndusInd Bank is expected to incur a loss of about Rs 1500 crore due to this derivative discrepancy
How much net worth is Indusind Bank expected to lose due to this derivative discrepancy?
IndusInd Bank is expected to lose 2.35% of its net worth due to this derivative discrepancy
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