IndusInd bank recovers after RBI's clean chit—Stock rallies 5%

IndusInd Bank shares rose 5 per cent on Monday's trade following an announcement by the Reserve Bank of India (RBI) that the private bank's financial situation was stable and was being kept under close observation. Depositors need not act on the speculative news at this point, the apex bank stated in a statement on March 15. After the news, the stock gained 5.19 per cent to a high of Rs 707 on BSE.

Scrip remains down 27 per cent

Nonetheless, the scrip remains down 27 per cent year-to-date compared to a 6 per cent decline for the BSE Sensex in the same period. The RBI remarks followed IndusInd Bank had announced a preliminary effect of 2.4 per cent of its net worth on account of a shift in the valuation of the derivatives transactions, triggering a cascade of downgrades in the stock. Experts stated that an adjustment would have to be made, which would even result in losses for the private lender in the quarter to March.

IndusInd Bank will report a profit during the fourth quarter

Managing Director and Chief Executive Officer Sumant Kathpalia, nevertheless, informed that IndusInd Bank will report a profit during the fourth quarter as well as the financial year notwithstanding the derivatives discrepancy. He is hopeful about the bank's capital adequacy in excess of 15 per cent. "Under public domain releases, the bank has already hired an external audit team to review in depth their systems in their current state, and assess and account for the net quantum of impact in a time-bound manner.

 IndusInd Bank is well capitalized and the bank's health is good

 Management and the Board have been instructed by Reserve Bank to take the remedial action completely in this quarter i.e., Q4FY25 following appropriate disclosures to all the stakeholders," RBI said in a statement on IndusInd Bank. It stated IndusInd Bank is well capitalized and the bank's health is good. The bank has maintained a secure Capital Adequacy Ratio of 16.46 per cent and Provision Coverage Ratio of 70.20 per cent based on auditor-approved bank's quarterly financials to December 31, 2024. Lender's liquidity coverage ratio was 113 per cent as of March 9, compared with the regulatory-suggested coverage of 100 per cent.