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Moody’s Affirms IndusInd Bank Ratings, Places BCA on Review for Downgrade

Synopsis:

Moody’s affirmed IndusInd Bank’s Ba1 rating but placed its BCA on review for a downgrade due to concerns over financial controls and derivative accounting. The agency cited strong capital and stable funding as positives. IndusInd Bank share price closed at ₹676.95, up 0.72%.


Moody’s Ratings has affirmed IndusInd Bank’s Ba1 long-term foreign and local currency deposit and issuer ratings while maintaining a stable outlook. However, the agency placed the Baseline Credit Assessment (BCA) and adjusted BCA under review for a downgrade due to concerns related to internal financial controls and derivative accounting. The review highlights potential risks to the bank’s profitability, capital, and funding structure, particularly in the retail unsecured loan segment.

Also read: Tata Motors Incorporates Digital.AI Labs to Expand in IT Sector

INDUSIND BANK LIMITED

Trade

838.41.45 (0.17 %)

Updated - 30 April 2025
843.10day high
DAY HIGH
810.05day low
DAY LOW
20241775
VOLUME (BSE)

Key Takeaways

  • Ratings affirmed at Ba1 long-term deposit and issuer ratings with a stable outlook

  • BCA placed under review for downgrade due to concerns over internal financial controls and risk management

  • Growing stress in retail unsecured loans could impact profitability and capitalisation

  • IndusInd Bank share price closed at Rs.676.95, up 0.72% on March 17, 2025

  • Systemic importance of the bank may lead to government support, helping maintain the Ba1 rating

Also read: Manappuram Finance Board to Consider Fundraising Proposals on March 20

Moody’s Assessment of IndusInd Bank’s Financials

Moody’s acknowledged IndusInd Bank’s strong capital position and core profitability, stating that these factors continue to support its current rating. The agency highlighted the growing stress in retail unsecured loans, which could lead to a rise in non-performing assets (NPAs) and erode capital buffers. If external audits reveal weaknesses in financial reporting or further lapses in derivative accounting, a one-notch downgrade in BCA is possible.

Factor

Moody’s View

Long-term rating

Ba1 (Stable outlook)

BCA and adjusted BCA

Under review for downgrade

Key concern

Internal controls on derivatives and risk management

Capital strength

Strong, but risk from unsecured loans

IndusInd Bank share price

Rs.676.95 (+0.72% on BSE)

Possible Scenarios for IndusInd Bank’s Rating

The final outcome of the review depends on the bank’s ability to address financial control issues and stabilise asset quality. Moody’s may downgrade IndusInd’s BCA if additional risk factors emerge, affecting profitability and capitalisation. However, government intervention or improved financial management could help sustain the current Ba1 rating.

While Moody’s has maintained IndusInd Bank’s long-term rating, the review for a BCA downgrade highlights concerns over financial controls and retail loan stress. Investors are watching for updates on governance and risk management, as these will determine future rating actions and IndusInd Bank share price trends.

Also read: IRCON Wins Rs.285 Crore Order in Meghalaya Secretariat Project

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This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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