IndusInd Bank Share Price Sees a 5% Surge Following RBI Statement.

Market Performance

IndusInd Bank's share price witnessed significant movement, surging over 5% in early trade on Monday. This increase followed a statement from the Reserve Bank of India (RBI), which assured that the bank remains financially stable and well-capitalized. The stock reached an intraday high of ₹707.00 per share on the BSE, reflecting a 5.19% gain.

IndusInd Bank experienced sharp volatility in the previous week, including a steep decline of over 28% after disclosing an accounting discrepancy.

RBI's Statement and Regulatory Oversight

The Reserve Bank of India addressed concerns regarding IndusInd Bank's financial health, stating that the bank is well-capitalized and has a stable financial position. The banking regulator also instructed IndusInd Bank's board to finalize remedial measures related to an estimated ₹2,100 crore accounting issue within the current quarter.

The bank previously reported an accounting discrepancy, impacting approximately 2.35% of its net worth. Following this disclosure, the stock witnessed a sharp correction in the market.

As per the financial data reviewed by auditors for the quarter ending December 31, 2024:

• Capital Adequacy Ratio: 16.46%
• Provision Coverage Ratio (PCR): 70.20%
• Liquidity Coverage Ratio (LCR): 113% (as of March 9, 2025, surpassing the 100% regulatory requirement)

To address concerns, IndusInd Bank has appointed an external audit team to review the issue and assess the final impact thoroughly.

Company Developments

RBI has directed the bank's management to complete the remedial measures by the end of the current quarter (Q4FY25). Upon completion of the review, the bank is required to provide necessary disclosures to all stakeholders.

Additionally, RBI reassured depositors that the bank's financial stability remains intact and is being closely monitored.

IndusInd Bank disclosed that the accounting issue was first identified between September and October 2024. The bank provided an initial update to the RBI last week, with the final impact expected to be determined once the external audit report is completed in early April.

HDFC Mutual Fund Increases Stake

HDFC Mutual Fund has increased its holdings in IndusInd Bank through various investment schemes. According to a stock exchange filing on 13 March , the mutual fund's total shareholding in the bank rose to 5.02% of its paid-up capital as of March 11, 2025.

Before this acquisition, HDFC Mutual Fund held 3,75,29,368 shares, equivalent to a 4.82% stake. An additional 15,92,410 shares (0.20% stake) were acquired through an open market transaction, bringing the total holding to 3,91,21,778 or 5.02% of the company's share capital.

Summary

IndusInd Bank's share price witnessed a significant rebound after RBI affirmed the bank's stable financial position. Despite concerns over an accounting discrepancy, the bank remains well-capitalized with sufficient liquidity coverage. Regulatory oversight is ongoing, and necessary remedial measures are expected to be completed within the current quarter. Meanwhile, HDFC Mutual Fund has increased its stake in the bank through additional share acquisitions.

Market participants are closely monitoring further developments, including the external audit report, which is expected to clarify the financial impact of the accounting discrepancy.