IndusInd Bank Shares Tumble 6% on Reports of Second Audit

Shares of IndusInd Bank fell over 6% in early trade on Tuesday after media reports suggested that the bank has initiated a second forensic audit. The bank’s board has appointed EY to investigate Rs 600 crore discrepancy linked to the accrual of interest income in its microfinance portfolio, according to a report by The Economic Times, citing sources familiar with the matter.

The bank has denied engaging EY for a forensic audit in a stock exchange filing.

"As a part of the process of finalisation of accounts, the Bank’s Internal Audit Department (IAD) is conducting a review of the Bank’s MFI business to examine certain concerns which have been brought to the Bank’s attention. In connection with this exercise, Bank is engaged with EY to assist the IAD in reviewing certain records of the Bank. The review by the Bank is ongoing," the lender said.

ET reported that the auditors flagged the issue during the ongoing statutory audit for the previous financial year. EY will conduct an investigation to determine if there were any lapses and establish accountability. This is in addition to the forensic audit being carried out by Grant Thornton Bharat, which is probing irregularities in IndusInd’s accounting of its forex derivatives portfolio.

Earlier this month, IndusInd informed the exchanges that accounting firm PwC had estimated potential losses of Rs 1,979 crore from accounting anomalies. This was higher than the initially estimated Rs 1,600 crore. The bank quantified the impact based on its last year’s June quarter earnings. The adverse impact (on a post-tax basis) of 2.27% was based on IndusInd’s net worth as of December 2024.

IndusInd Bank share price has surged 19.3% this month, but the banking stock is still down 19% since the start of 2025. Over the past six months, IndusInd Bank shares have declined 37%, while the stock has fallen 46% in one year. At 10:23 am, the shares of IndusInd were trading 3% lower at Rs 803.95 on the NSE, and was the worst hit in the Nifty 50 stock index.