IndusInd Bank Shares Surge 14% After CEO and Promoter Reassure Investors on Financial Stability

Stock Rebounds Strongly as Management Clarifies on Derivatives Losses

Shares of IndusInd Bank Ltd staged a sharp recovery on March 13, 2025, jumping nearly 14% from the day’s low, as the bank’s management provided clarity on its derivatives portfolio and reassured investors about its financial stability.

The stock rebounded to ₹690 per share on the National Stock Exchange (NSE), up from its intraday low of ₹606 apiece. This recovery helped the bank snap a five-day losing streak, during which concerns over derivative-related losses had triggered a sharp sell-off.

The Mumbai-headquartered private lender, a constituent of the Nifty 50, had seen its market valuation plunge by 26% on March 12, briefly falling below Yes Bank’s market capitalization. The sell-off had intensified after reports of discrepancies in its derivatives portfolio, which the bank estimated to have an impact of 2.35% on its net worth.

Bank Promoter Ashok Hinduja Assures Financial Strength, Pledges Capital Support

Following the sharp correction in the stock price, IndusInd Bank promoter Ashok Hinduja stepped in to address investor concerns, stating that the bank’s financials remain strong and that the promoters are ready to inject capital if required.

“Shareholders shouldn’t panic. These are normal routine problems. I understand their concern over why they were not informed earlier. Banking businesses are based on integrity and trust,” Hinduja said, emphasizing that the lender has adequate liquidity and capital backing.

His remarks came amid growing anxieties regarding the bank’s exposure to forex derivatives, which had led to a sharp decline in stock value.

IndusInd Bank CEO Confident of Profitability in Q4 Despite Derivative-Related Losses

Adding to investor confidence, IndusInd Bank’s CEO, Sumant Kathpalia, assured that the lender is likely to absorb the losses in the current quarter itself and still report a profit for Q4 FY25.

• “The full year won’t be a loss at all. And I think Q4 will also be in profit… The bank will start seeing great profitability from Q1 FY26,” Kathpalia told CNBC-TV18.
• The management’s positive outlook on profitability in the upcoming quarters provided a much-needed boost to investor sentiment, triggering a sharp rebound in the stock.

Stock Market Performance: IndusInd Bank’s Volatile Trading Session

• IndusInd Bank shares had plunged 26% on March 12, as investors reacted to news of discrepancies in the bank’s derivatives exposure.
• The stock touched an intraday low of ₹606 on March 13 before recovering 13.86% to ₹690.
• Despite the sharp rebound, the stock remains below its pre-selloff levels and faces scrutiny from regulators.

Regulatory Scrutiny: RBI Steps Up Monitoring of Banks’ Derivative Exposure

The Reserve Bank of India (RBI) has reportedly contacted several large banks to verify their hedging effectiveness and exposure to forex derivatives, according to a report by the Economic Times.

The central bank’s intervention highlights its increased vigilance over financial institutions’ risk management practices, particularly in light of recent concerns surrounding IndusInd Bank’s derivatives transactions.

While IndusInd Bank’s management has assured investors of its financial strength, the bank remains under close scrutiny from regulators and market participants, who will be keenly watching its Q4 financial performance and risk mitigation measures.