Key Highlights
- SEBI barred ex-CEO Sumant Kathpalia and four others for insider trading linked to undisclosed derivative losses.
- IndusInd Bank shares rose up to 0.7% following SEBI's market ban on former top executives.
Shares of crisis-hit IndusInd Bank rose after a volatile start, after the market regulator barred its former CEO, Sumant Kathpalia, and four other senior executives from trading in the securities market.
IndusInd Bank's stock rose 0.7 percent to ₹810 per share after falling 0.3 percent at the open. The stock pared some gains to trade 0.6 percent higher, compared to a 0.15 percent increase in the Nifty50 in early trading.
The company's shares have dropped more than 6% from their recent peak of ₹863, reached earlier this month. In March, the stock fell more than 30% after it discovered discrepancies in its derivatives portfolio. This year, the stock has fallen 15.4%, while the benchmark Nifty50 has risen 4.8%.
SEBI bans IndusInd's ex-CEO and four others from markets
These individuals violated insider trading regulations by trading in IndusInd Bank shares while in possession of unpublished price-sensitive information (UPSI), according to an interim order issued by the Securities and Exchange Board of India (Sebi) on May 28.
Other executives named in the order include Arun Khurana (former executive director and deputy CEO), Sushant Sourav (head of Treasury operations), Rohan Jathanna (head of GMG operations), and Anil Marco Rao (chief administrative officer for consumer banking operations).
Sebi conducted a suo motu preliminary examination after Chairman Tuhin Kanta Pandey stated that the market regulator is investigating any "egregious violations" by the lender's senior management.
Sebi discovered that senior management had been aware of the problem since at least December 2023 but had failed to disclose it to the public in time. Sebi also cited emails indicating that by December 4, 2023, top executives had internally acknowledged a "huge impact" due to these discrepancies.
Also Read: SEBI Probes IndusInd Bank's Senior Management for Serious Violations
IndusInd Bank's Q4 results
IndusInd Bank reported its first net loss in 19 years, totaling ₹2,329 crore for the quarter ended March 31, 2025.
The lender lost over ₹2,500 crore due to accounting discrepancies in the derivatives and microfinance segments discovered during the quarter, which resulted in increased provisions.
Despite a sharp Q4 loss, the bank reported a net profit of ₹2,575 crore for FY25, down 71% YoY. In Q4FY25, the lender's net interest income (NII) decreased by 43% YoY to ₹3,048 crore. Other income also decreased by 72% YoY to ₹709 crore.
