IndusInd Bank Share Price Rebounds Despite Record Q4 Loss and Fraud Disclosures

Market Performance

On May 22, 2025, IndusInd Bank's share price witnessed a dramatic swing in intraday trade. The stock plunged nearly 6% during the opening session, hitting a low of ₹725.65 on the BSE.

However, the losses were quickly erased as the share price surged over 2%, touching ₹788.35 around 9:45 AM, making it the top performer in the Nifty 50 index for the day.

Despite the rebound, the stock's long-term performance remains under pressure:

• Down 19% in 2025 YTD
• Declined 45% over the past year

Main News

The turnaround in share price came just a day after IndusInd Bank posted its worst quarterly performance ever. The bank reported a net loss of ₹2,329 crore for Q4 of FY25, revealing a series of financial misstatements and frauds uncovered during a clean-up operation initiated by its interim management.

Key Issues Disclosed:

• Bad loans increased sharply to ₹5,014 crore
  • Of which ₹1,800 crore was misclassified in the microfinance business
• ₹1,960 crore loss due to incorrect derivative trade reporting
• ₹674 crore reversal in wrongly recorded interest income
• ₹172 crore fraud involving employee misconduct
• ₹595 crore correction related to misclassified entries under "Other Assets" and "Other Liabilities"

These adjustments contributed to the unprecedented quarterly loss and raised serious concerns about the bank's financial integrity.

Company Details

Veteran banker Sunil Mehta has stepped in as the non-executive chairman to steer the bank toward stability. The management has stated that all financial irregularities have been fully disclosed, and the bank aims to begin FY26 with a clean slate.

Sunil Mehta reaffirmed:

"The financial impact of all the issues that we have declared has already been undertaken in financial year 2024-25."

The bank is now focused on rebuilding trust, restoring performance, and maintaining a transparent governance structure.

Financial Overview

Revenue & Losses

• Q4 FY25 Net Loss: ₹2,329 crore (record high)
• Key contributor: ₹5,014 crore in NPAs (Non-Performing Assets)

Frauds and Adjustments

• Derivative Trade Misreporting: ₹1,960 crore
• Interest Income Reversal: ₹674 crore
• Internal Fraud: ₹172 crore
• Other Adjustments: ₹595 crore

These numbers highlight the financial strain and misgovernance faced during the quarter.

Summary of the Article

Despite reporting a record-breaking quarterly loss and uncovering multiple financial discrepancies, the IndusInd Bank share price rebounded sharply in intraday trade on May 22, 2025. This suggests potential pricing in the worst-case scenario by the market.

While the long-term outlook remains cautious due to past governance issues and weak financials, the bank's renewed leadership has expressed confidence in moving forward with greater transparency and accountability.