The financial markets witnessed a brutal shake-up as IndusInd Bank’s stock nosedived by 27%, leaving mutual funds nursing a staggering ₹6,900 crore in losses. The sudden crash, triggered by the bank’s disclosure of a 2.4% dent in its net worth due to derivative valuation changes, sent shockwaves through the investment community.
How Deep Is the Damage?
As of February 2025, 35 mutual funds collectively held over 20.88 crore shares of IndusInd Bank, valued at a hefty ₹20,670 crore. However, following this stock correction, their worth has plummeted to ₹13,770 crore, wiping out nearly one-third of their market value overnight.
The biggest casualty? ICICI Prudential Mutual Fund, which held the largest stake, now slashed to ₹3,779 crore. Following closely are HDFC Mutual Fund (₹3,564 crore) and SBI Mutual Fund (₹3,048 crore). Other major players, including UTI, Nippon India, Bandhan, and Franklin Templeton, have seen their investments shrink between ₹740 crore and ₹2,447 crore.
A Crisis in the Making?
Between April 2024 and January 2025, mutual funds poured ₹10,200 crore into IndusInd Bank, betting on its long-term growth. However, sensing trouble, ₹1,600 crore exited the stock in February 2025, signaling a shift in investor sentiment.
The bigger picture is even more alarming. IndusInd Bank has lost over 58% of its value since its April 2024 peak of ₹1,576 per share. This freefall has not only unsettled investors but also raised questions about the bank’s risk management strategies.
What Lies Ahead?
With such a massive wealth erosion, investors and fund managers are now in damage-control mode. The focus will be on how IndusInd Bank navigates this crisis, reassures stakeholders, and regains market confidence. Whether this correction presents a buying opportunity or signals deeper structural concerns remains to be seen.
For now, one thing is clear: the IndusInd crash has rewritten the rules of caution for mutual fund investors.