IndusInd Bank share price falls to a one-year low after RBI grants CEO only a single-year extension

The share’s intraday low as well as 52-week low on the Bombay Stock exchange (BSE) was ₹886.40, which was down by 5.4% from the previous close.

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As of 1 pm IST, the bank’s shares were trading at ₹905.80 on the BSE. This was a drop of 3.31% or ₹31.

This is the second consecutive time that the RBI approved a shorter tenure for Kathpalia than what the board proposed.

“This price drop was accompanied by a 12.1% surge in open interest, representing a two-month high of 5.36 million shares added,” Axis Securities wrote in its Daily Derivatives Insights report. “Since the series’ inception, the stock has depreciated by 10%, while open interest has escalated by 14%, or 5.96 million shares.”

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The brokerage added that “this correlation between price decline and increased open interest indicates a significant short build-up, demonstrating a persistent bearish sentiment in the stock.”

Kathpalia had led IndusInd Bank for five years, overseeing a strong recovery in its stock, which had more than doubled from ₹398 to ₹936 before recent declines, according to an Economic Times report.

However, investor sentiment has been tempered due to concerns over asset quality, particularly in the microfinance segment, and management stability.

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IndusInd Bank’s stock lost 42.45% over the last year year, 8.41% in the last three months, and 9.11% in the last week alone, according to the report.