IndusInd Bank share drops 8%, recovers fully; what's next?

Shares of IndusInd Bank Ltd  dropped 8 per cent in Wednesday's trade and were on the verge of falling to sub-Rs 600 level, before a recovery erased entire losses. The stock gained as promoter reportedly Ashok Hinduja shareholders not to panic, assuring them of liquidity support to the bank, if needed.

The stock also recovered, as CEO Sumant Kathpalia reportedly said that his bank was looking to offset the losses, arising due to accounting discrepancy in valuations of past derivatives transactions, within the March quarter itself. He suggested that the fourth quarter as well as the full year will likely have profit figures. The RBI recently extended Kathpalia's tenure as CEO by one year only against three years sought by the bank.

On Wednesday, the IndusInd Bank stock plunged 7.70 per cent to hit a low of Rs 605.40, before erasing the entire losses. It was later trading at Rs 661.65, up 0.87 per cent. The banking stock was down for the past five straight sessions. It is down 32.20 per cent in 2025 so far and 57.11 per cent in the past one year.

The stock had been seeing fresh selling after the bank reported accounting discrepancy, but the  management insisted the problem was neither identified by the auditor nor the regulator, but the IndusInd Bank management itself.

In an interview to CNBC TV18, Ashok Hinduja said that promoters were waiting for approval from the RBI to increase their stake in the bank from 15 per cent to 26 per cent and as early as the lender gets the RBI approval, it would immediately inject capital into the bank.

The stock has seen a flurry of downgrades following the recent developments. Kotak Institutional Equities cut its target price on the stock to Rs 850 from Rs 1,400 earlier, while downgrading the stock to 'Reduce' from Buy'. MOFSL suggested a revised target price of Rs 925. ICICI Securities suggested a target price of Rs 850. Nuvama sees the stock at Rs 750 while Nirmal Bang pegs the stock at Rs 900. PL Capital sees the stock at Rs 1,000. The stock hit its lower circuit at Rs 720.50. At this price, it is down 53 per cent in the past one year.