IndusInd Bank share price: The shares of private lender IndusInd Bank slumped nearly 6% in intraday trade on Friday after it flagged fresh accounting errors following an internal audit of its microfinance business.

IndusInd Bank share price slipped 5.7% to the day’s low of ₹735.95 on the BSE. The stock opened at its day’s low itself and recouped some losses as the session progressed. As of 10.30 am, IndusInd Bank stock was at ₹755.80, down 3.1%.

Fresh Discrapencies

IndusInd Bank said its Internal Audit Department (IAD) has found that a ₹674 crore was incorrectly recorded as interest over three quarters of FY 24-25″>cumulative amount of ₹674 crore was incorrectly recorded as interest over three quarters of FY 24-25, which was fully reversed as on January 10, 2025.

Also, following the receipt of a whistleblower complaint, the IAD was asked by the Audit Committee of the Board to review transactions recorded in “other assets” and “other liabilities”. The IAD has submitted its report on May 8, 2025 that there were unsubstantiated balances aggregating to ₹595 crore in “other assets” accounts of the Bank. These were set off against corresponding balances appearing in “other liabilities” accounts in January 2025, the lender added.

“The IAD has also examined the roles and actions of key employees in this context. The Board is taking necessary steps to strengthen internal controls, fix accountability of the persons responsible for these lapses and will take action as appropriate,” the company added.

Mounting Troubles

The latest discrepancies follow the accounting lapses IndusInd Bank had reported in March in the derivative portfolio, estimated to have an adverse impact of approximately 2.35 per cent of the bank’s net worth as of December 2024.

Following this, the bank appointed the external agency PwC to assess the impact on the bank’s balance sheet, lapses at various levels, and suggest remedial action.

The agency, in its report, has quantified the negative impact of the above as of June 30, 2024, at ₹1,979 crore.

Following this saga, CEO Sumant Kathpalia and Deputy CEO Arun Khurana had resigned from the bank on April 29. IndusInd board has appointed a Committee of Executives to oversee the operations of the bank, till a new MD & CEO assumes charge or a period of three months.

Meanwhile, the IndusInd Bank’s board has also hired Grant Thornton to conduct a forensic audit into accounting lapses.

Brokerages Downgrade Stock

Following the disclosure of the latest round of discrepancies, brokerages CLSA and Invested have downgraded IndusInd Bank stock and also slashed target prices, as per media reports.

CLSA has downgraded IndusInd Bank shares to ‘Hold’ from ‘Outperform’ and slashed the target price to ₹780 from ₹900 earlier. Meanwhile, Investec pegged IndusInd Bank’s share price target at ₹650 vs ₹700 earlier while also downgrading the stock to ‘Sell’ from ‘Hold’.

“IndusInd Bank has disclosed ₹1960 crore of cumulative overreported income over 5-7 years. Assuming 25% of this happened in FY24, another 10 bps of NIM is structurally lost,” it added.

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