IndusInd Bank’s shares have experienced a significant decline, closing 27% lower at ₹655 on Tuesday. This sharp drop follows the bank’s disclosure of accounting discrepancies related to foreign exchange derivatives, which could result in a substantial one-time impact on its earnings.
On Monday, IndusInd Bank reported a 2.35% reduction in its net worth as of December 2024, attributing this to an underestimation of hedging costs associated with past forex transactions. Analysts estimate the financial impact to be between ₹15 billion and ₹20 billion (approximately $171 million to $229 million).
This development has raised concerns about the bank’s internal controls and has led to a reassessment of its stock valuation. The bank’s shares have now fallen 46% since an earnings miss in late October, making it the poorest performer in the Nifty 50 index over the past year.
The broader Indian stock market has also been affected, with declines in the information technology and private banking sectors amid global market turmoil.
Investors and analysts will be closely monitoring IndusInd Bank’s efforts to address these issues and restore confidence in its financial reporting and internal controls.