Brokerages downgrade IndusInd after disclosures of fresh fraud
Brokerages including HDFC, Nuvama and IIFL securities advised their clients to reduce or sell IndusInd stocks in their portfolio after the bank revealed further lapses and instances of fraud in its fourth quarter review.
The bank reported its worst quarter, posting a net loss of more than ₹2,300 crore as it accounted for all the discrepancies that accumulated over fiscal 2025, according to the bank's financial statements.
'IIB has been guilty of betraying stakeholder trust multiple times over the past few years with repeated episodes of misgovernance. The bank was severely impacted during the IL&FS crises (2018) and the pandemic (2020). Now, having admitted to multiple accounting lapses over the past couple of months, we believe that IIB is faced with a severe loss of credibility, which will need years and a complete overhaul to rebuild,' said HDFC Securities in its analyst report further adding that IndusInd was among the worst in terms of compliance and it was 'operating akin to an NBFC,'
Despite this, the bank's stock closed 1.82% up at 785.10 on the BSE on Thursday, as the bank said that it was taking action against the employees involved in the fraud and in expectation of a new leadership. Further, the Chairperson and promoter of IndusInd International Holdings of Ashok P Hinduja in a statement expressed his 'unequivocal trust in the Chairman & Board of Directors of the Bank for their appropriate, swift actions in order to address discrepancies and attendant areas of concern.' He further added that the regulator was dealing with this issue in an orderly manner.
In a separate event in New Delhi, Securities and Exchange Board of India (SEBI) Chief Tuhin Kanta Pandey said that 'if there are any egregious violations by anyone in its capacity, SEBI is looking into them.'
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