IndusInd Bank shares experienced a significant decline on April 22, 2025, dropping over 6% to reach ₹776.15 on the BSE. This downturn follows the bank’s decision to appoint Ernst & Young (EY) for a second forensic audit concerning a ₹600 crore discrepancy in its microfinance portfolio .
Key Factors Behind the Share Price Decline
- Forensic Audit Initiation: The bank’s move to engage EY for a second forensic audit has raised investor concerns about the extent of financial irregularities, leading to a loss of confidence .
- Previous Accounting Discrepancies: Earlier this month, IndusInd Bank disclosed a 2.27% reduction in its net worth due to accounting discrepancies in derivative transactions, amounting to ₹19.79 billion. This revelation has already impacted investor sentiment negatively.
- Management Changes: The Reserve Bank of India has reportedly advised the bank’s CEO and Deputy CEO to step down following these financial discrepancies. Such leadership changes amid financial scrutiny can further unsettle investors .
Market Reaction
Despite broader market gains, with the Nifty 50 rising by 0.38%, IndusInd Bank’s shares fell sharply due to these internal issues. The bank’s stock has been under pressure since March, with a cumulative decline of over 18% following the initial disclosure of accounting lapses.
For a more in-depth analysis of the situation, you can refer to this video: