IndusInd Bank Share Price Impacted by Derivative Accounting Discrepancies

Market Performance

Following the announcement of accounting issues related to past derivative transactions, IndusInd Bank experienced a sharp drop in its market valuation. On March 10, the disclosure caused a 27% decline in the share price. Although there has been some recovery since then, shares were last reported closing at ₹736 on Tuesday.

Derivative Accounting Gaps and Financial Impact

IndusInd Bank revealed that it has identified inconsistencies in the accounting of previous derivative trades. According to a recent assessment conducted by PwC, the estimated adverse financial impact stands at ₹1,979 crore.

The bank stated that this impact would be reflected in the fiscal year 2024–25 financial results. The estimated loss is projected to reduce the bank's net worth by 2.27% post-tax as of December 2024. This figure is slightly lower than the earlier internal estimate of a 2.35% impact disclosed in March 2025.

PwC's review was initiated after the bank uncovered the discrepancies in October 2024. However, due to its prior engagement with the bank, PwC could not conduct a forensic audit. As a result, Grant Thornton Bharat (GTB) was appointed in March 2025, per the Reserve Bank of India's directive. GTB is currently investigating the root causes of the marked-to-market (MTM) derivative losses and assessing accountability within the institution. The findings from this audit have yet to be disclosed.

Company Financials and Deposit Trends

The bank's provisional financial figures for the March 2025 quarter indicated modest changes in its deposit base:

• Term and CASA Deposits: A 2-percentage point sequential decline was observed.
• CASA Growth: Current and savings account deposits grew by 32.8% as of March 2025, compared to 34.9% in the December 2024 quarter.
• Total Deposits:
  • Quarter-on-Quarter Growth: 0.4% increase
  • Total Deposits (March 2025): ₹4.11 lakh crore
  • Year-on-Year Growth: 6.8%, compared to 11% growth in the December quarter

Conclusion

IndusInd Bank is addressing identified accounting irregularities in its derivative trades, with the estimated financial impact to be included in its FY25 statements. An independent forensic audit is underway to investigate these discrepancies further. Meanwhile, IndusInd bank's share price and deposit growth trends reflect the market's response to the developments.