Tale of the Tape 

Good evening everyone.

Markets were back in the red with Nifty and Sensex ending down -0.8% each. Midcaps (-0.5%) and Smallcaps (-0.2%) saw smaller cuts. The advance-decline ratio was in favour of the bears (3:2). Here’s the NSE500 heatmap:

It was a sea of red across sectors. FMCG (-1.4%), IT (-1.3%) and Auto (-1%) witnessed the most selling pressure.

IndusInd Bank has journeyed from accounting boo-boo to plain ol fraud! Read our top story to get the lowdown on what’s going on.

Colgate Palmolive India was the top NSE 500 loser after a Q4 miss. Meanwhile, IndiGo was up after a solid Q4 show. More details below.

Garden Reach Shipbuilders, Emcure Pharma and GMM Pfaudler saw big moves today. Check out their charts below to find out why.

ONGC (-3%) was the top Nifty loser after its Q4 profit dropped -20% YoY.

BSE cracked -4% after reports said NSE asked SEBI to change its weekly expiry date to Tuesday.

Bajaj Auto (+1%) was in focus after it said it would acquire a majority stake in Austria’s KTM AG.

TD Power (-2%) was down after 1.3 cr shares, 8.1% equity, changed hands in a block deal; the buyers and sellers were not known at the time of writing. 

Belrise Industries IPO sailed through on Day 2 of bidding.

Stock
WTF! IndusInd Bank

The IndusInd Bank saga has gone from bad to WORSE! The lender has finally admitted to the big F word -- fraud. It says several employees in its accounting dept may have engaged in fraud which led to its recent accounting scandals. We’ve come a long way from the bank calling it just a “lapse”, so let’s get into it.

State of play: We know the bank took a Rs 1,960 cr hit over “discrepancies” in its derivatives portfolio. But now it's disclosed two more issues. Firstly, it incorrectly recorded interest & fee income in its microfinance portfolio. It reversed this and will take a Rs 423 cr hit. Secondly, it wrongly classified some bad microfinance loans as OK. They are actually NPAs it turns out, so there’s another Rs 1,791 cr hit in provisioning. After accounting for ALL of this, the lender posted a whopping Rs 2,329 cr net loss in Q4; it’s first loss in nearly 20 years!

So WTF went wrong? The bank says fraud but offers no deets. The auditors say “senior officials” overrode “key internal controls” and also hid all of this from the board & auditors. But it’s still unclear how deep the rot goes. Where did the fraud occur? Were the accounting errors actual mistakes and the fraud took place while trying to cover it up? Or were some of the accounting issues ACTUAL fraud -- aka senior officials taking bribes in exchange for not classifying loans as NPAs? The latter implies this episode is far from over.

Naturally, IndusInd has been hit with downgrades & target price cuts (HSBC sees another -15% downside). Analysts say the lender has lost credibility. That said, the stock did end in the green today. It’s possible investors believe the worst is finally over. The board also wants to move past things: it says it will propose a new CEO to the RBI by June 30.

Specials
5 Stocks Under Rs 500 - By SEBI RAs

As markets recover, which stocks should be on your radar? Check out the top Mid and Small Cap stocks under ₹500 with massive upside potential, as shared by SEBI RAs on Stocktwits.