IndusInd Bank Share Price Trades Flat Amid Insider Trading Crackdown

Market Performance

The IndusInd Bank share price opened slightly lower at ₹803.05 on Thursday compared to its previous close of ₹804.75 on the BSE. However, it recovered marginally to touch an intraday high of ₹810.60, up by 0.73%.

Despite the regulatory developments, the IndusInd Bank share price held steady during early trade, reflecting a neutral investor sentiment.

As of 9:25 AM, IndusInd Bank's share price was up 0.53% at ₹809.05 apiece.

Main News

The Securities and Exchange Board of India has barred IndusInd Bank's former CEO, Sumant Kathpalia, and four senior officials from the securities market. The action was taken following alleged insider trading activities involving the IndusInd Bank share price.

Key Details of SEBI Action:

• ₹19.78 Crore has been impounded from five individuals.
• The officials include:
  • Sumant Kathpalia (former CEO)
  • Arun Khurana (former Deputy CEO)
  • Sushant Sourav (Treasury Ops Head)
  • Rohan Jathanna (GMG Ops Head)
  • Anil Marco Rao (Chief Admin Officer – Consumer Banking)

The SEBI interim order highlighted that these individuals traded IndusInd Bank shares while possessing unpublished price-sensitive information (UPSI)—the information related to discrepancies in the bank's derivative portfolio accounts.

The UPSI was internally acknowledged on December 4, 2023, but officially classified as such only on March 4, 2025. Public disclosure followed six days later.

RBI Order Sparks Major Financial Disclosures and Share Price Crash

The issue dates back to a Master Direction issued by the RBI, which revealed operational and financial irregularities.

Financial Impact:

• Internal estimate of the derivative discrepancies: ₹1,749.98 Crore
• Disclosed material impact after public classification: ₹1,529.88 Crore
• Total shares sold by insiders (Dec 2023 – Mar 2025): 479,000
• No purchases by insiders during this period

During this time, IndusInd Bank's share price averaged ₹1,541.75 in December 2023, peaking at ₹1,618.90 on December 28. Following disclosure, the stock plunged to ₹605.40 on March 12, 2025 — a sharp 60% decline.

Despite the turmoil, the bank stated there was no operational or financial disruption arising directly from SEBI's interim order.

Q4 Financial Impact

The bank reported its worst quarterly performance for the March 2025 quarter, driven by a clean-up of financial irregularities.

Revenue-Related Adjustments:

• Incorrect derivative recognition: ₹1,960 Crore
• Interest income reversal: ₹674 Crore
• Misclassified microfinance fee income (fraud): ₹172 Crore
• Incorrect manual entries (Other Assets & Liabilities): ₹595 Crore

These adjustments resulted in a net loss of ₹2,329 Crore for Q4 FY25.

An internal audit revealed that former Key Management Personnel (KMPs) had overridden internal controls, prompting the bank to report the matter to the Central Government.

Summary of the Article

• IndusInd Bank's share price traded flat following SEBI's ban on former executives for insider trading.
• SEBI impounded ₹19.78 Crore from five former officials.
• The alleged trading was based on undisclosed financial discrepancies in derivative portfolios.
• IndusInd reported a ₹2,329 Crore loss in Q4 due to the implementation of corrective accounting measures.
• The stock has declined 19% over the past three months, 17% year-to-date, and 45% over the past year.

The IndusInd Bank share price so far reflects the long-term impact of internal mismanagement and regulatory scrutiny.