EXPLAINER | All eyes on IndusInd Bank stock today: Insider trading probe, SEBI ban on former CEO, and regulatory action

Market watchers on Thursday are on the lookout for major flux in the shares of embattled IndusInd Bank following the Securities and Exchange Board of India (SEBI) announcing it barred the former CEO of the lender and four other senior officials on Wednesday. Early signs were positive, with the stock jumping close to 1.22 per cent in the first couple of hours.

The markets watchdog said in an interim order that it collectively impounded close to ₹20 crore (₹19.78 crore, to be precise) from five senior officials, including former IndusInd Bank CEO Sumant Kathpalia and barred them from the securities markets in connection with alleged insider trading.

SEBI alleged that the five senior executives traded in the lender’s stock despite being in possession of insider information—unpublished price-sensitive information, as SEBI puts it—thereby violating regulations in place against insider trading.

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During the preliminary examination conducted by SEBI, on the basis of the evidence collected so far, it is prima facie seen that all noticees traded in the scrip being aware of the unpublished price-sensitive information, related to the discrepancies and averted or avoided huge losses,” read the interim order.

Earlier this month, the lender posted its March quarter results, where it absorbed the losses of the financial irregularities it disclosed earlier in lieu of accounting lapses.

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It amounted to a ₹1,960 crore loss from incorrect recognition of derivative trades, ₹674 crore in incorrect accounting-related cumulative interest income reversal and a ₹172 crore fraud where employees led it to incorrectly classify income while setting of ₹595 crore in incorrect manual entries.

Year-to-date, IndusInd stock has declined close to 16 per cent so far.

Sensex jumps 500 points, Nifty soars in early trade

BSE benchmark Sensex soared more than 504 points in early trade, while the NSE Nifty climbed a little over 137 points. IndusInd, the now-disgraced Sensex stock, will soon be out of the benchmark index that would come into effect from June 23, 2025. It, along with Nestle India, would be replaced by Bharat Electronics Ltd (BEL) and Tata Group-owned Trent Ltd.

Other gainers in the morning rally on the Sensex were Infosys, Tata Steel, Tech Mahindra, HCL Tech, CS, Sun Pharma, Tata Motors and HDFC Bank. The market rally, paired with the positive response to the SEBI action, moved the markets up, along with news of an American federal court blocking US President Donald Trump from imposing sweeping tariffs on imports under the emergency powers law.

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