IndusInd Bank Share Price Dips Following Forensic Audit Developments

Market Performance

• 1-Month Performance: IndusInd Bank's share price has increased by 17%.
• Year-to-Date (YTD): The stock is down by 17%.
• 6-Month Performance: A decline of 37% has been recorded.
• 1-Year Performance: The share price has dropped by 45%.

As of 9:45 AM on April 22, 2025, shares of IndusInd Bank were trading 3.10% lower at ₹802.35 on the BSE. Earlier in the day, the share price had declined by as much as 6.26%, reaching ₹776.15 apiece.

Forensic Audit and Financial Discrepancy

IndusInd Bank has initiated a second forensic audit to investigate a ₹600 crore discrepancy identified in its microfinance portfolio. Ernst & Young (EY) has been appointed to carry out this audit after inconsistencies were found in the recognition of interest income during the previous financial year's statutory audit.

The audit findings triggered additional communication under Section 143(12) of the Companies Act 2013. This legal provision requires auditors to report any suspected fraud directly to the government.

This investigation parallels a separate ongoing forensic review led by Grant Thornton Bharat (GTB), which examines irregularities within the bank's forex derivatives portfolio. According to the bank, the discrepancy related to the microfinance segment likely occurred during the second or third quarter of the prior fiscal year and is not expected to span several years.

Company Disclosures and Financial Impact

On March 10, 2025, IndusInd Bank had previously acknowledged inconsistencies in the balances of its derivatives portfolio. The internal assessment indicated a post-tax impact of 2.35% on the bank's net worth as of December 2024.

Further, on April 15, the bank disclosed findings from an external audit by PwC, which estimated a negative impact of ₹1,979 crore due to the derivatives discrepancy. This equates to a post-tax hit of 2.27% on net worth. This figure was slightly below the Reserve Bank of India's estimated impact of approximately ₹2,000 crore.

Summary

The recent decline in IndusInd Bank's share price has followed the initiation of a second forensic audit addressing a ₹600 crore discrepancy in its microfinance portfolio. The move follows findings from ongoing statutory and external audits. While the bank's share price has seen gains over the past month, broader timelines indicate significant underperformance. The outcomes of the audits are expected to clarify the financial implications for the bank further.