IndusInd Bank slips 5% ahead of accounting discrepancies report on Mar 28

External auditor PwC is likely to submit its report to IndusInd Bank's board on Friday March 28, regarding accounting discrepancies in its derivatives portfolio, PTI reported quoting sources

IndusInd Bank share price slipped 5 per cent to ₹633.55 on the BSE in Tuesday’s intra-day trade, falling 8 per cent in two days. The run on the stock comes ahead of a PwC report on the private sector lender's accounting discrepancies scheduled to release on March 28. 

 

External auditor PwC is likely to submit its report to IndusInd Bank's board on Friday regarding accounting discrepancies in its derivatives portfolio, PTI reported quoting sources.

 

The comprehensive report by PwC is expected to point out actual loss to the bank due to the accounting discrepancies, lapses at various levels and remedial action, the news agency reported.

 

 

On March 10, 2025, IndusInd Bank had disclosed the ongoing review by an external agency, of certain discrepancies identified by the Bank, in its account balances relating to its derivative portfolio and that, once completed, the Bank will appropriately reflect any resultant impact in its financial statements.

 

Banking sector regulator, Reserve Bank of India had directed the board and the management of IndusInd Bank to take remedial action during the current quarter itself after making required disclosures to all stakeholders.

 

The board of directors of IndusInd Bank, at its meeting held on March 20, 2025, decided to appoint an independent professional firm to conduct a comprehensive investigation to, amongst others, identify the root cause of the discrepancies, assess the correctness and impact of the accounting treatment of the derivative contracts with regard to the prevailing accounting standards/ Guidance, identify any lapses and establish accountability in relation to the above, the Bank said.

 

IndusInd Bank share price had hit a multi-year low of ₹605.40 on March 12, 2025. In the past one month, the stock has underperformed the market by falling 39 per cent. It has corrected 60 per cent from its 52-week high price of ₹1,576 hit on April 8, 2024. Today, the stock is likely to close at its lowest level since November 3, 2020 of ₹ 646.75 on the BSE.

 

Meanwhile, Moody's Ratings said on March 17, 2025, that it has placed IndusInd Bank's baseline credit assessment (BCA) under review for downgrade due to concerns over "inadequate internal controls" after the lender found discrepancies in its derivative accounts.

 

"The impact of the derivatives transactions, coupled with the ongoing stress in the retail unsecured loans, is likely to hurt the bank's profitability, capital and funding, potentially leading to a downgrade of the BCA," Reuters reported quoting Moody's.

 

Baseline credit assessments are based on the company's own financial health, without considering any help it might get from related companies or the government.

 

Meanwhile, the past year has been challenging for IndusInd Bank. The outcomes have been less than desired and marred by event risks. This was reflected in price movement with more than 50 per cent correction in the past six months. 

 

Analysts at Elara Capital said they have yet to prune its earnings estimates, but this event does create challenges around potential downside revision. “The question is whether the worst is over or is there still more in store. Given the recent events, we are finding it difficult to make an assessment, and thus, the bank is staring at significant risk of an earnings downgrade,” the brokerage firm said in the stock update.