IndusInd Derivatives See Bear Claws Since October End

While market has plunged, other bank stocks didn't see surge in open positions

- Ram Sahgal, Neha Joshi & Shayan Ghosh

MUMBAI: Bears began converging at the IndusInd Bank derivatives counter as October drew to a close, a time when the private lender detected the debacle that would jolt its investors only months later.

The trading patterns in IndusInd Bank's active futures contract since October, and the sudden build-up in cash market volumes more recently, appear to suggest that segments of the market may have anticipated something amiss much before the exit of the bank's chief financial officer in January, and the surfacing of accounting lapses this week. A day after the bank informed stock exchanges about discrepancies in the derivatives portfolio on Monday, the bank's stock tumbled a steep 27%.

Interestingly, chief executive officer (CEO) Sumant Kathpalia said on Monday that the bank had identified the discrepancies in September-October, after which it appointed an external agency.