IndusInd hits trust deficit wall

Severe blow The IndusInd Bank stock has significantly underperformed the Nifty Bank index in the past six months.

- Pallavi Pengonda & Harsha Jethmalani

It takes years to build trust, but just seconds to break it. No one knows this better than IndusInd Bank Ltd's investors as they see the bank's stock crumble amid back-to-back negative developments.

On Monday, after market hours, the private sector lender informed the stock exchanges about discrepancies in its derivatives portfolio. This pertains to transactions done in the past 5-7 fiscal years (FY24 and earlier). Investors dragged the stock down more than 25% on Tuesday.

"A negative derivatives' disclosure has the potential to unnerve investors more than a back-dated NPL disclosure," wrote Nuvama Research analysts in a 10 March report.

IndusInd's internal review estimates an impact of 2.35% on its net worth as of December due to the discrepancies. This would mean a post-tax earnings impact of ₹1,600 crore.