In the past four trading days, the stock has tanked 21 per cent, despite bank’s clarification that its exposure to housing finance company (HFC) is fully/strongly collateralised with no overdues. In comparison, the benchmark S&P BSE Sensex was down 2.3 per cent during the period.
“The bank's gross exposure (aggregate of funded and non-funded) to the HFC, its subsidiaries and associate finance companies stands at approximately 0.35 per cent of the loan book. The exposure to HFC is fully/strongly collateralised with no overdues. The group also maintains equal or higher amounts of unpledged fixed deposits with the bank,” IndusInd Bank said in a BSE filing on Monday. The bank made clarification on speculation on the bank's exposure to a large HFC.
Analysts at Reliance Securities believe the bank’s high exposure to stressed sectors and management transition could continue to limit any meaningful upside in the stock price in near-to-medium term.
“While its superior margin and healthy fee income profile continue to aid return ratios, asset quality surprises can’t be ruled out given the high concentration in corporate portfolio, a weak operating environment and elevated exposure to stressed sectors including real estate, Power (NFB), and Telecom (NFB),” the brokerage firm said in a management meet update note on September 26, 2019.
At 11:17 am, IndusInd Bank was trading 4 per cent lower at Rs 1,237 on the BSE, against a 0.42 per cent fall in the Sensex. A combined 6.6 million shares changed hands on the counter on the NSE and BSE till the time of writing of this report.