INDUSINDBK

Update for Investors

's Potential Removal from Sensex and Nifty IndusInd Bank, the fifth-largest bank in India, is facing the possibility of being removed from the benchmark Sensex and Nifty indices following a significant 30% decline in its stock price this year. The company's concerns about losses related to its derivatives portfolio have contributed to this decline. Existing constituents ranked 39 or below on average free float market cap are deleted from the index to make place for higher-ranked stocks. IndusInd Bank is ranked 57th and is a sure deletion. Deletion from the BSE Sensex index will require passive trackers to sell 15.5 million shares at the close on June 20, while deletion from the Nifty Index will require passive trackers to sell 27.4 million shares at the close on September 29. Prospects of IndusInd Bank's Inclusion in a Global Index However, there is hope that an increase in foreign portfolio investor (FPI) investment "room" will eventually lead to IndusInd being included in a global index, providing some stability amidst the selling resulting from its potential removal from the Sensex and Nifty. Following an increase in foreign room to more than 20 per cent, IndusInd Bank will be added to the index at the close on March 21, but at a 5 per cent float. Accounting Irregularities and Stock Performance IndusInd Bank's shares have experienced a significant drop, losing 30% of their value in the past week. This decline can be attributed to various factors, including the Managing Director's one-year extension (as opposed to the typical three-year term) and the revelation of a Rs 1,577 crore net worth decrease due to accounting discrepancies. Consequently, investor sentiment on Dalal Street has turned pessimistic, leading many traders to avoid the stock. In a recent disclosure to the exchanges, the private lender reported that an internal review has projected an adverse impact equivalent to approximately 2.35% of the bank's net worth as of December 2024.