IndusInd Bank’s shares are in focus once again. This time, the market regulator SEBI has banned Sumant Kathpalia, former chief executive officer of IndusInd Bank, from participating in securities market activities, along with four other individuals for violating insider trading norms. The stock price of IndusInd Bank rose 0.6% to an intra-day high of Rs 810.20 as soon as markets opened.
The other four individuals facing restrictions in the securities market include Arun Khurana, ex-executive director and deputy CEO; Rohan Jathanna, who managed GMG Operations; Sushant Sourav, who led treasury operations; and Anil Marco Rao, former chief administrative officer in consumer banking operations.
SEBI’s interim directive
SEBI has frozen these five individuals’ bank accounts and demat accounts to the extent of their gains. The market watchdog also impounded Rs 19.78 crore through an interim directive.
SEBI’s preliminary investigation found that key individuals sold large quantities of shares just before the public announcement.
“All the Noticees, viz. Noticee Nos. 1 to 5, are hereby restrained from buying, selling or dealing in securities, either directly or indirectly, in any manner whatsoever, until further orders,” said SEBI in a statement.
According to a report by PTI, the bank’s senior officials conducted trades in IndusInd Bank shares while possessing unpublished price-sensitive information (UPSI), which violates insider trading norms.
Kathpalia alone dumped 1.25 lakh shares of the lender, while Khurana offloaded over 3.48 lakh shares. SEBI noted that none of these trades were pre-planned or disclosed under any trading plan, violating insider trading norms.
SEBI said this action was necessary to protect investor confidence and ensure that the securities market remains fair and transparent.
IndusInd Bank account discrepancy issue: What happened so far?
The case revolves around a discrepancy that IndusInd Bank found in its derivative portfolio. The issue first surfaced internally in late 2023, after the RBI proposed a new direction on derivative accounting.
One of the SEBI’s orders revealed that top officials estimated a financial impact of Rs 1,572 crore, about 2.35% of the bank’s total net worth, by December 2023. However, the officials didn’t disclose this information to the stock exchanges until March 10, 2025. Following this, IndusInd Bank’s stock price corrected 27% in a single session, falling from Rs 900.60 to Rs 655.95.
IndusInd Bank stock performance
The stock price of IndusInd Bank has risen 3.58% in the last five trading sessions. The stock has fallen 3.8% in the previous one month and over 19% in the previous six months. IndusInd Bank’s share price has tanked 44% in the past one year.