IndusInd Bank shares worth ₹1,600 crore sold by mutual funds in February ahead of accounting discrepancy

Top mutual funds in India sold IndusInd Bank shares worth ₹1,600 crore in February 2025, according to market data. The sell-off occurred just before the disclosure of an accounting discrepancy at the private lender, which subsequently led to the stock’s largest single-day decline on record.

Mutual Funds Reduce Exposure to IndusInd Bank Shares

Several leading mutual funds reduced their holdings in IndusInd Bank shares during February. Among Nifty 50 stocks, IndusInd Bank witnessed the most significant reduction in mutual fund ownership.

As per a report by Motilal Oswal Financial Services, mutual fund holdings in IndusInd Bank declined by 7.4% to ₹20,020 crore. The number of IndusInd Bank shares held by fund houses fell by 7.3% to 20.22 crore by the end of February.

Data from Nuvama Alternative & Quantitative Research revealed that fund houses collectively offloaded IndusInd Bank shares worth ₹1,600 crore in February, marking the largest reduction in holdings among Nifty 50 stocks.

Other notable reductions by asset management companies (AMCs) during the month included InterGlobe Aviation and Bajaj Finance, with each witnessing sales worth ₹1,300 crore.

Major Sellers and Buyers of IndusInd Bank Shares

Prominent fund houses that reduced their stake in IndusInd Bank included Kotak Mutual Fund, which offloaded shares worth ₹510 crore, and Motilal Oswal Mutual Fund, which sold shares worth ₹126 crore.

On the contrary, Quant Mutual Fund increased its stake in IndusInd Bank, purchasing shares worth ₹305 crore in February, according to the Nuvama report.

IndusInd Bank’s Accounting Discrepancy and Market Reaction

On March 10, IndusInd Bank disclosed an accounting discrepancy in derivative transactions conducted before April 1, 2025. The estimated financial impact of this issue stands at 2.35% of the bank’s net worth, amounting to approximately ₹1,577 crore. Following this revelation, IndusInd Bank share price plummeted by 27% on March 11, resulting in a market capitalization loss of nearly ₹20,000 crore. IndusInd Bank stock also entered the Futures & Options (F&O) ban list.

IndusInd Bank’s CEO and Managing Director, Sumant Kathpalia, stated that the accounting lapse was identified between September and October last year. The bank provided a preliminary update to the Reserve Bank of India (RBI) last week, with the final impact assessment expected to be completed by early April following an external review.

RBI’s Assurance and Stock Recovery

Despite the sharp decline, IndusInd Bank share price showed signs of recovery after the Reserve Bank of India (RBI) reassured customers of the lender’s financial stability. The central bank confirmed that IndusInd Bank remains ‘well-capitalized’ and maintains a ‘satisfactory’ financial position. Additionally, the RBI has directed the bank’s board to undertake necessary remedial measures.

In a statement issued on March 15, the RBI emphasized, “The Reserve Bank would like to state that the bank is well-capitalized and the financial position of the bank remains satisfactory.”

At 1:05 PM, IndusInd Bank shares were trading 0.19% higher at ₹678.25 apiece on the BSE.

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