📌 At a Glance:
By Prashant Marathe | 21st May 25
IndusInd Bank has just reported its Q4 FY25 results, but numbers were the least shocking part.
The real bombshell? A ₹2,600 crore fraud-style cleanup of fake profits, misreporting, and shady accounting tricks going back NINE YEARS.
From writing off ₹1,959.98 crore of fake derivative “profits” to reversing ₹673.82 crore of interest income that never should’ve been there in the first place — this isn’t just a result… it’s a confession.
🧾 The Shocker Breakdown: What Really Happened?
“We have reason to believe fraud may have been committed.”
— Joint auditors, in a polite-as-hell audit report that actually screams RUN!
🧨 1. Fake Profits from Internal Derivatives = ₹1,960 Cr GONE
- Since FY2015-16, IndusInd had been cooking books with internal trades.
- These weren’t real profits — just notional derivative gains that somehow made it to the P&L.
“Sorry, that ₹1,960 crore? Turns out it wasn’t real. Just vibes.” 😬
💸 2. Reversal of Interest Income: ₹674 Cr
- They had incorrectly recorded cumulative interest income.
- Add another ₹172.58 crore of wrongly booked fees.
- Total reversal impact? ₹846.4 crore — just… vanished.
📉 3. Other Manual Accounting Errors = ₹595 Cr
- Incorrect entries in “Other Assets” and “Other Liabilities” were quietly netted off.
- Aka: “Oops, our balance sheet was a PowerPoint fantasy.”
👀 4. Microfinance NPAs Hidden = ₹1,885 Cr
- Loans were falsely marked as “standard” (aka healthy), when they were actually garbage.
- Had to mark ₹1,885 Cr as NPA and made a 95% provision — ₹1,791 Cr gone.
🧾 Financial Highlights (aka Damage Report)
| 🔍 Metric | Q4 FY25 | Q4 FY24 | FY25 | FY24 |
|---|---|---|---|---|
| Net Profit | −₹2,32,887 lakh | ₹2,34,915 lakh | −₹2,23,599 lakh | ₹8,97,730 lakh |
| Interest Earned | ₹10,63,385 lakh | ₹12,19,853 lakh | ₹39,59,115 lakh | ₹38,11,931 lakh |
| Gross NPA | ₹11,04,639 lakh | ₹6,69,338 lakh | — | — |
| Net NPA | ₹3,28,711 lakh | ₹1,96,890 lakh | — | — |
| GNPA % | 3.13% | 1.92% | — | — |
| NNPA % | 0.95% | 0.57% | — | — |
| ROA | −1.67% | 1.90% | — | — |
📉 Market Reaction Incoming?
CMP: ₹766.80
📉 Fall Today: −1.98%
🧨 Expected tomorrow: Lower circuit knocking on the door
This isn’t just a bad quarter — it’s a systemic failure of internal controls.
Auditors even said senior execs overrode accounting controls and concealed errors from the Board!
📉 EduInvesting Verdict: This is the YES Bank moment for IndusInd.
🔥 Verdict Summary:
- 💀 ₹2,600 Cr of past sins cleaned in one go
- 🤡 Auditors literally flagged potential fraud
- 🚨 No dividend declared to preserve capital
- ❌ EPS, ROA, NPAs — all tanked
- 📉 Stock already in downward spiral — could crash further
🧠 Should Investors Buy the Dip?
Absolutely NOT.
This isn’t a dip.
This is a pit.
You don’t build long-term wealth buying into fraud-cleanup quarters.
You don’t invest in a bank that had to fire-fight ₹2,600 Cr of ghost income with a fire extinguisher full of excuses.
🧮 Hidden Red Flags the Market Might Still Miss
- 🧾 Prior year NPAs and interest overstated = past profits were fake.
- 💼 Senior management override = rotten from the top.
- 🕵️ Audit letter under Section 143(12) = SUSPECTED FRAUD officially informed to govt.
This is no longer a technical issue. It’s a governance red alert.
🛡️ What Could Change the Sentiment?
- Massive board overhaul
- RBI enforcement action to “clean up”
- Potential merger talks with stronger private banks (ICICI? Axis?)
But all of this is speculative. Until then, expect pain.
📣 Meme Zone:
IndusInd Bank Boardroom Right Now:
“Kaun tha woh jo bola tha sab theek hai?”
🧑💼 CFO: “Sir, audit se pehle theek tha.”
💼 CEO: “Audit ke baad to asli Diwali manayi hai humne.”
🔖 Tags:
IndusInd Bank Q4 FY25, IndusInd fraud 2025, IndusInd Bank lower circuit, IndusInd Bank scam, IndusInd vs Yes Bank, Microfinance NPAs, RBI investigation IndusInd, banking fraud India, EduInvesting roast mode, financial scandal India, IndusInd earnings FY25
