IndusInd Bank Shares Gain Even As Sebi Bans Former CEO, Four Others For Insider Trading

IndusInd Bank Insider Trading Case: IndusInd Bank’s share price surged over a per cent in early trade on May 29, 2025 even as the Securities and Exchange Board of India (Sebi) last evening banned the private lender’s former MD and CEO, Sumant Kathpalia, and four other senior executives from trading in the securities markets till further notice on grounds of alleged insider trading.

According to investigations still underway, the capital markets regulator had reportedly found that these officials had sold the bank’s shares while having access to unpublished price-sensitive information (UPSI). This allowed them to avoid losses worth Rs 19.78 crore.

IndusInd Bank Share Price Today

IndusInd Bank shares rose as much as 1.5 per cent during the day to log an intra-day high of Rs 817 per share on the NSE. The stock is still trading at a discount of 47 per cent from its 52-week high of Rs 1,550.

On a year-to-date (YTD) basis, IndusInd Bank shares have yielded a negative return of nearly 16 per cent, significantly underperforming the Nifty Bank index, which gained 8.26 per cent in the same period.

The Allegations

The issue centres around the discrepancies found in IndusInd Bank’s derivatives portfolio, where the bank itself estimated an adverse impact of 2.35 per cent (Rs 1,529 crore) of the bank’s net worth as of the December 2024 quarter.

The bank had first made this disclosure on March 10, 2025, after which its shares saw a sharp correction of 27.16 per cent, falling from the closing price of Rs 900.60 on March 10, 2025 to the closing price of Rs 655.95 on March 11, 2025. The bank’s stock is still trading at a discount of 9.3 per cent from its pre-disclosure level.

Sebi’s Crackdown On IndusInd Bank’s Top Execs

Kamlesh C Varshney, Sebi’s whole time member, in his interim order, noted, “The evidence collected so far during the examination done by Sebi points to the fact that Noticees traded in the scrip of IBL (IndusInd Bank) while being in possession of UPSI related to the discrepancies in financials.”

Accordingly, Sebi has freezed the five officials’ bank accounts to the extent of the losses they avoided. Other former senior officials of IndusInd Bank include Arun Khurana, deputy CEO; Sushant Sourav, head of treasury operations; Rohan Jethanna, head of GMG operations; and Anil Marco Rao, chief administrative officer for consumer banking operations. All four have already resigned from the bank.

In the interim order, Varshney noted, “The trading done by insiders, while being in possession of UPSI caused notional monetary loss to the innocent investors who did not have free and equal access to the crucial/material information owing to it not being disclosed to them as and when it became available to the company.”

He further added, “Indulging into insider trading activities while being an insider and being in possession of UPSI is tantamount to committing fraud upon the innocent investors and jeopardising their interest, who did not have access to the material information.”

Sebi has further directed these officials to submit a full inventory of all their assets within 15 days.