Indusind Bank Share Crashed by 25 Percent on Tuesday Impact of irregularities in bank derivative portfolio

Indusind bank share: The shares of IndusInd Bank of Mumbai-based private sector have fallen by 25 percent on Tuesday and it has come down to Rs 674.55, a lower level of 52-week. This is the biggest decline in bank shares in a day after November 2020. Now the question comes that why the bank shares are declining? Let’s know

Forex hedging was disturbed

IndusInd Bank has revealed the accounting description in its derivative portfolio, due to which its stock has declined by 20 %. The internal review has revealed that the bank had underestimated the hedging cost associated with the previous foreign exchange transactions. Due to disturbances in forex hedging, the previous quarters were shown more profits.

Investors were reduced to the bank

This revelation can have an impact of up to Rs 1,600-2,000 crore on the bank’s net worth. Based on the December 2024 data, it can have a negative impact of up to 2.35 percent on the bank’s net worth. After this revelation, the trust of investors on the bank has reduced rapidly, due to which the stock has reached the lowest level since November 2020. In the last one year, the bank shares have already come down by 42 percent.

Share declines on Monday too

Here, the bank has appointed an external agency to investigate the facts found in the internal review. Now the final report is awaited. The bank has also said that he is ready to deal with this effect on the net worth. Let us know that this review was done after the new guidelines on the derivative portfolio released by the Reserve Bank of India (RBI) in September 2023. When the bank revealed the issue after the board meeting held on March 10. On Monday, the bank’s stock declined by 4 percent, due to the approval of the Reserve Bank to extend the tenure of the CEO to one year instead of extending it by one year.

Banking sector shocked

The bank’s banking sector also got a shock of a huge decline in IndusInd Bank shares. The Nifty Bank index declined by 0.7 percent, the Nifty 50 declined by 0.27 percent. This indicates the reduced trust of investors in banking shares.

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