IndusInd Bank: Rs 18,000 Crores Wiped Out in One Day!
IndusInd Bank
₹18,000 Crores Wiped Out in One Day! IndusInd Bank Promoter Assures Investors: “Don’t Panic, We’re Ready to Invest More Capital”
IndusInd Bank Shares Take a Hit: Bank’s Market Value Drops 27% Amid Derivative Portfolio Irregularities
IndusInd Bank’s shares took a significant hit on March 10, plummeting by nearly 27%, which led to a sharp drop in the bank’s market value by ₹18,000 crore.
The sharp decline in stock prices has sent shockwaves through the financial market. The crash followed the revelation of discrepancies in the bank’s derivatives portfolio, which are expected to negatively impact its net worth by approximately 2.35%. The issue is expected to result in a loss of around ₹1,500 crore in profits.
In response to the turmoil, Ashok Hinduja, the promoter of IndusInd Bank, has moved quickly to reassure both investors and the market.
He emphasized that despite the setback, the bank’s financial position remains robust. He stressed that if additional capital is required, the promoter group is ready and prepared to invest further, demonstrating their unwavering confidence in the bank’s future.
Ashok Hinduja’s Reassurance to Investors
In an exclusive interview with CNBC-TV18, Hinduja urged shareholders not to panic, describing the issues as “normal problems” that the bank’s management will address swiftly.
He acknowledged that investors may be frustrated by the lack of earlier communication but assured them that the bank remains committed to transparency.
He stated, “The basis of banking is trust and honesty, and we are firm on this principle. Shareholders need not panic. The management will resolve this issue in due time.”
Bank’s Leadership and Financial Stability
Hinduja expressed his full faith in the bank’s board and management team, stating that they have consistently navigated through challenges over the past 30 years.
He reiterated that this situation, though unfortunate, would be resolved just like previous challenges the bank has faced.
Highlighting the bank’s commitment to transparency, Hinduja explained that the discrepancies in the derivatives portfolio were neither identified by the bank’s auditors nor regulators but were instead self-identified by the bank’s management.
This move to openly disclose the issue reflects the strength and integrity of the bank’s leadership, according to Hinduja, and he hoped that the market would appreciate the bank’s transparent approach.
Capital Infusion and Stake Increase
Hinduja also revealed that the promoter group is waiting for approval from the Reserve Bank of India (RBI) to increase its stake in the bank from 15% to 26%.
Once the approval is granted, the promoter group is ready to immediately infuse capital into the bank to further strengthen its position.
Hinduja made it clear that the bank’s capital base remains strong even amidst these current challenges, and that any further capital infusion will be made as necessary.
Confidence in IndusInd Bank’s Recovery
Hinduja expressed unwavering confidence in the leadership of IndusInd Bank, noting that trust is vital in the banking sector and that the bank’s leadership has earned his full trust.
Drawing comparisons to similar challenges faced by global banks, Hinduja emphasized that IndusInd Bank would emerge from this situation stronger.
This crisis follows an internal review of the bank’s derivatives portfolio, which found discrepancies. While the bank has made the issue public, it also reassured stakeholders that the problem is being handled transparently, reflecting the management’s commitment to the bank’s long-term success and stability.
Despite the challenges, Ashok Hinduja’s message remains clear: IndusInd Bank is not facing a crisis, and with the full backing of the promoter group and the leadership team, the bank is well-positioned to recover and thrive.
