InvestorQ : Why does IndusInd Bank continue to hit new lows on a regular basis? Is there a level where we can buy the stock?
shrinidhi Rajan made post

Why does IndusInd Bank continue to hit new lows on a regular basis? Is there a level where we can buy the stock?

Answer
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Riya Dwivedi answered.
7 months ago


IndusInd has recently touched a new 3-year low in the stock markets. There have been a couple of reasons for the sharp fall including the quality of assets and the recent succession issue at the top. Let me talk about the asset quality first. In the last four quarters it has emerged that IndusInd has huge exposures to stocks like Jet Airways, IL&FS, Dewan Housing etc. All these have not gone down too well with investors and were also regularly pulled up by the RBI for non-compliance with the asset classification norms. The second is the issue of succession planning which is more recent in nature as Romesh Sobti, the CEO steps down on attaining the age of 70 as per the RBI regulations. There were also cues in the market that Rajeev Sabharwal of Tata Capital (former ICICI Bank) could be a key candidate for the top job at IndusInd Bank. However, the bank has denied this news. Sobti’s term ends on March 23 and the name has apparently been sent to RBI for approval. The stock has been downgraded to Negative from Stable by Moody’s and that is also impacting the stock price. It may be too early to buy the stock at these prices and it would be better to wait till the NPA level stabilizes.