desk
Share
News Topical, Digital Desk : Mumbai headquartered private bank IndusInd Bank is once again in the news. On Thursday, a news came that there was an accounting error in the bank. After this, the bank gave clarification, but brokerage firms downgraded the rating of the bank's shares and also reduced the profit estimates. Today, on May 16, the stock started falling as soon as the market opened. In the early trading, this stock topped the list of Nifty's weakest shares.
IndusInd Bank told the stock exchange on Thursday evening that its Internal Audit Department (IAD) investigated the microfinance (MFI) business. This investigation revealed that interest of ₹ 674 crore was recorded incorrectly in three quarters of the financial year 2025. This mistake came to light in the IAD report on 8 May 2025 and it was completely rectified on 10 January 2025.
The bank board will take strict action
Apart from this, after a whistleblower complaint, the audit committee investigated the "Other assets" and "Other liabilities" accounts. In this, balances of ₹ 595 crore were found, which had no basis. These balances were corrected in January 2025. The bank said that it investigated the role of those employees who were responsible for this. The board is now taking strict action so that such mistakes do not happen in future.
What is the opinion of Brokerage Firms on IndusInd Bank?
CLSA: This brokerage reduced Indusind Bank's rating from "BUY" to "HOLD" . Also, the target price of the stock was reduced to ₹780 . CLSA said that the bank's net interest margin (NIM) was 17 basis points lower due to wrong interest income of ₹674 crore. Due to this, the profit estimate for the financial year 2025 was reduced by 22%. The estimates for 2026 and 2027 were also reduced by 13% and 17% respectively. Morgan Stanley: This brokerage gave
"Equal-weight" rating and kept the target price at ₹755 . Morgan Stanley said that the profit estimate for 2026 and 2027 could be reduced by 15% to 20%.
There was a mistake earlier also This mistake has come to light at a time when just two weeks ago, the bank's MD & CEO Sumant Kathpalia and Deputy CEO Arun Khurana had to resign. Then irregularities were detected in the derivatives portfolio, which caused a loss to the bank's net worth. A new MD & CEO has not been appointed yet. The bank's operations are being run by a "Committee of Executives", which has been approved by the Reserve Bank of India (RBI).
Performance of IndusInd Bank Share IndusInd Bank's share has recovered by 30% from its 52-week low of ₹ 606. This low level was seen after the first accounting error. On Thursday, the stock closed at ₹ 780, with no major change. But today, May 16, new news may affect the stock.
--Advertisement--
