Bears arrived at IndusInd months before the bad news broke

Subscribe to enjoy similar stories. Mumbai: Bears began converging at the IndusInd Bank derivatives counter as October drew to a close, a time when the private lender detected the debacle that would jolt its investors only months later.

The trading patterns in IndusInd Bank's active futures contract since October, and the sudden build-up in cash market volumes more recently, appear to suggest that segments of the market may have anticipated something amiss much before the exit of the bank's chief financial officer in January, and the surfacing of accounting lapses this week. A day after the bank informed stock exchanges about discrepancies in the derivatives portfolio on Monday, the bank's stock tumbled a steep 27%.

Interestingly, CEO Sumant Kathpalia said on Monday that the bank had identified the discrepancies in September-October, after which it appointed an external agency. Since IndusInd Bank is listed on the derivatives segments of both NSE and BSE, investors can hedge, and traders who don't own the stock can take positional buy or sell trades if they feel the stock could rise or plunge.

IndusInd Bank's most active futures contract (or front-monthfutures contract) since October-end shows a sharp build-up in outstanding or open positions as its stock began falling, indicating bearish sentiment build-up. To be sure, markets have corrected sharply since October, but the sharp surge in open positions of IndusInd was not seen in peers like Kotak Mahindra Bank or ICICI Bank, as per Bloomberg data.

Average open positions of the bank's front-month contracts, which stood at 35,000-60,000 between March and October last year, shot up to more than 90,000 from November2024 to March 2025, data showed. This coincided with the