Why IndusInd Bank Share Price is Falling

Banking stocks have been caught in a prolonged downturn, with several major players hitting their 52-week lows amid selling pressure in the Indian stock market.

The Nifty Bank index has declined over 3% in the past month, reflecting investor concerns about economic uncertainty, tighten liquidity conditions, and global market volatility.

Amid the ongoing correction, IndusInd Bank has been one of the worst-affected banking stocks, witnessing a steep 12.95% decline over the past month.

Here's what's dragging the company's shares down.

#1 Bulk Deal

A major factor behind the stock's recent decline has been a bulk deal transaction involving a foreign institutional investor (FII). The investor offloaded 5,086,943 equity shares, valued at Rs 5 billion (bn), leading to a sharp 4% drop in a single trading session.

Large institutional sell-offs often raise concerns about the stock's near-term outlook, prompting additional selling pressure from other market participants.

#2 Cautious outlook

IndusInd Bank's cautious stance on its microfinance segment has contributed to the recent decline in its share price.

The bank has acknowledged ongoing stress in this segment, citing high borrower indebtedness, declining rural incomes, and election-related disruptions as key challenges. Management expects these issues to persist for at least another quarter before showing signs of stability in FY26.

This strain has significantly impacted the bank's financials, with non-performing assets (NPAs) in the microfinance category rising to Rs 24.32 bn from Rs 22.59 bn in the previous quarter. The segment now accounts for 9% of IndusInd Bank's total loan book, raising concerns among investors about further slippages.

As a result, the bank was forced to set aside higher provisions for potential bad loans, with provisions and contingencies surging 87% year-on-year (YoY) to Rs 17.44 bn.

The rising NPAs and increased provisions have taken a toll on profitability, with IndusInd Bank's net profit plunging 39% YoY to Rs 14.01 bn. The bank's asset quality deteriorated, with its gross NPA ratio climbing to 2.25% from 2.11% in the previous quarter and 1.92% a year ago.

Moreover, the bank's core performance indicators also showed signs of strain. Net interest income (NII) dropped to Rs 52.28 bn from Rs 52.96 bn in the year-ago period, while net interest margin (NIM)-a key measure of profitability-contracted to 3.93%, down from 4.08% in the previous quarter and 4.29% a year earlier.

#3 GST Demand Notice

Another factor contributing to IndusInd Bank's recent share price decline is the issuance of a Goods and Services Tax (GST) demand notice. On 25 February 2025, the bank received a demand order from the Deputy Commissioner of State Tax, Ahmedabad, citing alleged short payment of GST.

The total financial impact, including penalties, amounts to Rs 216.2 m.

While this sum may not be significant in the context of the bank's overall financials, regulatory disputes often raise concerns about compliance risks and potential legal battles.

Moreover, while IndusInd Bank has stated that it will explore filing an appeal against the order, the possibility of further scrutiny from tax authorities has fuelled apprehension in the market.

With banking stocks already under pressure due to broader market corrections and sector-specific headwinds, this unexpected tax demand has only added to the bearish sentiment.

What Next?

IndusInd Bank is intensifying its digital expansion efforts, leveraging technology to drive customer acquisition and engagement.

The bank's direct digital model is scaling rapidly, adding over 70,000 clients every month.

Its newly launched INDIE app has witnessed strong initial adoption, reflecting growing customer interest in digital banking solutions.

Additionally, the bank introduced INDIE for Business, which has already garnered over 10,000 users within a month.

How IndusInd Bank Shares have performed lately

IndusInd Bank shares have declined 12% in the month gone by. In 2025 so far, the stock has fallen about 3%.

The stock touched its 52-week high of Rs 1,576 on 8 April 2024 and a 52-week low of Rs 923.4 on 27 January 2025.

At the current price, IndusInd Bank trades at a price to book (PB) multiple of 1.1.

About IndusInd Bank

IndusInd Bank is one of the new-generation private sector banks in India. It commenced operations in 1994.

The bank's business lines include corporate banking, retail banking, treasury, foreign exchange, and more.

The bank's business divisions include retail/consumer banking, consumer finance, global markets, group corporate & commercial banking, and investment banking.

It provides multi-channel facilities, which include automated teller machines (ATMs), net banking, mobile banking, and international debit cards. The bank has multi-lateral tie-ups with other banks providing access to more than 18,000 ATMs.

They also offer DP facilities for stock and commodity segments.

The bank specialises in retail banking services and is also working on expanding its network of branches all across the country.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

To know more about IndusInd Bank, check out its factsheet and quarterly results on our website.

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