IndusInd Bank MD & CEO Sumant Kathpalia steps down amid derivative accounting lapse

IndusInd Bank Ltd on Tuesday announced that Sumant Kathpalia resigned as managing director and chief executive officer (CEO) with effect from the close of working hours on April 29, 2025.

"We hereby inform that Mr. Sumant Kathpalia (DIN:01054434), Managing Director & CEO, Key Managerial Personnel of the Bank, has by his letter dated April 29, 2025, resigned from services of the Bank with effect from close of working hours on April 29, 2025," the crisis-hit private lender stated in a BSE filing.

"I wish to submit my resignation from the services of the Bank in relation to the ongoing Derivatives discussion. I undertake moral responsibility, given the various acts of commission/ omission that have been brought to my notice. I would request that my resignation be taken on record at close of working hours today," Kathpalia  stated in his resignation letter.

Prior to this, the private lender's deputy CEO Arun Khurana also resigned due to the recent accounting discrepancies in the derivatives trading.

The bank has faced multiple headwinds that clouded its near-term outlook. The key concern was a 2.35 per cent overstatement in its derivatives portfolio, stemming from long-standing internal trade accounting discrepancies.

Meanwhile, IndusInd Bank shares rose 0.82 per cent to close at Rs 837.30. Technically, the scrip traded higher than the 5-day, 10-, 20-, 30-day and 50-day simple moving averages (SMAs) but lower than the 100-day, 150-day and 200-day SMAs. Its 14-day relative strength index (RSI) came at 61.71. A level below 30 is defined as oversold while a value above 70 is considered overbought.

As per BSE, the stock has a price-to-earnings (P/E) ratio of 9.03 against a price-to-book (P/B) value of 1. Earnings per share (EPS) stood at 92.75 with a return on equity (RoE) of 11.07. According to Trendlyne data, IndusInd Bank has a one-year beta of 1.1, indicating high volatility.

As of March 2025, promoters held a 15.83 per cent stake in the private bank.