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Shares of IndusInd Bank plummeted 18.63 percent to ₹1,041.45 on the BSE on Friday as of 10.37 AM. The decline followed the bank’s announcement that it would miss its full-year loan growth target, making it the latest lender to signal challenges in the microfinance sector.
The bank also reported an unexpected drop in its second-quarter profit, attributed to a rise in bad loans from its microfinance segment, which provides collateral-free loans to individuals with annual incomes of up to ₹3 lakh.
“Obviously, I don’t think we will be able to achieve 18 per cent to 22 per cent [growth],” said CEO Sumant Kathpalia. “Given what has happened, we must monitor performance quarter by quarter.” The bank’s loan growth reached 13 per cent –15 per cent in the first two fiscal quarters.
IndusInd’s shares have fallen to their lowest level since May 2023, pulling down bank stocks by 0.8 per cent and emerging as the worst performer on the Nifty 50 index.
Kotak Mahindra Bank and RBL Bank have reported a deterioration in asset quality, with significant increases in bad loans driven by stress in credit card and microfinance loans.
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