Indusind Bank shares down by 26% ; MFs take Rs.6000 Crore hit - These MFs have taken the worst hit

The recent turmoil surrounding IndusInd Bank has sent shockwaves through the investment community, particularly affecting mutual funds with significant stakes in the bank. On March 11, 2025, the bank’s stock plummeted by 20%, primarily due to disclosed discrepancies in its derivative accounts, leading to a 2.35% reduction in its net worth.

As of February 2025, data from Ace Equities indicated that 35 mutual funds collectively owned over 20.88 crore shares of IndusInd Bank, valued at approximately ₹20,670 crore. However, following the recent stock decline, these holdings have diminished to around ₹14,600 crore, marking a substantial erosion of ₹6,000 crore in mutual fund investments.

Between April 2024 and January 2025, IndusInd Bank attracted mutual fund inflows totaling ₹10,200 crore. However, February 2025 witnessed an outflow of approximately ₹1,600 crore, reflecting growing investor apprehension. The bank’s stock has experienced a sharp correction, declining over 54% from its April 2024 peak of ₹1,576 per share.

Analysts estimate that the 2.35% impact on net worth could translate into a potential profit reduction of around ₹1,500 crore in Q4 FY25. While the financial impact is notable, the more pressing concern revolves around the bank’s credibility. To address these issues, IndusInd Bank has engaged an independent external agency to review and validate its internal findings.
In light of these developments, Kotak has cautioned against potential further negative outcomes, emphasizing the bank’s significant underperformance. The report underscores the importance of the board’s proactive response in assessing the situation and implementing safeguards to prevent similar occurrences.

Mutual Fund No. of Shares Held (Crore) Value Before Fall (₹ Crore) Value After Fall (₹ Crore) Loss (₹ Crore)
ICICI Prudential MF 5.4 3,779 2,663 1,116
HDFC MF 5.1 3,564 2,509 1,055
SBI MF 4.6 3,048 2,144 904
UTI MF 3.2 2,447 1,723 724
Nippon India MF 2.3 1,800 1,278 522
Bandhan MF 1.5 1,200 852 348
Franklin Templeton MF 0.9 740 525 215

On a more optimistic note, Kotak suggests that improving financial metrics, particularly asset quality within the microfinance portfolio, could help alleviate investor concerns. Additionally, sustained deposit growth and adequate liquidity might reframe this event as a one-time misstep rather than a lingering issue.

1 Like

@RahulDeshpande

These Mfs have taken the worst hit

Which MFs? You forgot to mention that.

Updated!

Shares of IndusInd Bank Ltd. crashed on the exchanges on Tuesday, in the trading session that followed the disclosure made by the private lender regarding the accounting discrepancy in its forex derivatives portfolio.

Highlights the importance of something like this even more.

@RahulDeshpande I thought that equity shares with derivative instruments were not meant to have circuit limits ( Price bands for the day).

Do you know if that rule is still in place or if it has been changed?