On April 22, 2025, at 10:34 AM, IndusInd Bank shares were trading at ₹804.30, down 3% from the previous close of ₹828. The stock opened lower at ₹790, touched a day’s high of ₹808, and fell to an intraday low of ₹775. This decline came after news broke out that the bank has started a second forensic audit to investigate a ₹600 crore discrepancy in its microfinance portfolio.
The market reacted negatively to the reports, as investors grew more concerned about the bank’s internal financial controls and accounting practices. The second audit, led by Ernst & Young (EY), adds to the pressure, especially when a separate ongoing probe is already being conducted into the bank’s forex derivatives portfolio.
Overview of Contents
Why Second Audit?
According to a report by The Economic Times, the problem was found during the regular audit process. As per the Companies Act, auditors issued a special note (Section 143(12)) to the board, suggesting further investigation. That’s when the bank decided to bring in EY for a detailed forensic check.
The focus of the EY audit will be:
- Whether the ₹600 crore issue is due to operational mistakes.
- If any fraud or wrongdoing happened.
- Who is responsible for the mistake.
This audit will run alongside another audit being done by Grant Thornton Bharat (GTB). That one is checking problems in the way the bank managed its forex derivatives portfolio.
Previous Problem with Derivatives
Earlier, on March 10, the bank had revealed that there were accounting discrepancies in its derivatives portfolio. An internal review had estimated a loss of around 2.35% of the bank’s net worth. But a recent external audit by PwC reported a bigger loss—₹1,979 crore, or about 2.27% of net worth as of December 2024. This audit had several disclaimers and raised more questions.
Changes in Bank’s Management
In the middle of all this, the bank has made some management changes. Santosh Kumar has been promoted as the new Deputy CFO, taking over from interim CFO Arun Khurana, who will continue to lead treasury operations. This change comes just ahead of the bank’s Q4 financial results.
Stock Price Performance
- In the last one month, IndusInd Bank shares have gained 17%.
- But the stock is still down 17% year-to-date (YTD).
- Over the last 6 months, shares have fallen 37%.
- And in the last one year, the stock is down 45%.
This means that even though the stock saw a short recovery in the past few days, investor confidence remains low due to these serious financial concerns.
Final Words
IndusInd Bank is now under pressure to clean up its accounting practices and win back the trust of its investors. Two big audits—one for forex issues and another for the microfinance income problem—show that the bank is trying to fix its internal processes. But for now, the market has reacted negatively, and the real impact will be seen after both audit reports are out.