IndusInd Bank shares saw a significant jump in early trade on Wednesday, rising as much as 3% before settling 2.15% higher at Rs 650.75 on the BSE around 9:51 am. This surge came after reports indicated that the bank is gearing up to launch a formal search process in April to fill several key leadership positions, including that of the CEO.
The bank plans to engage two prominent global recruitment firms — Egon Zehnder and Korn Ferry — to handle the search. The firms will be tasked with identifying a successor for the current MD and CEO, Sumant Kathpalia, whose tenure was extended by the Reserve Bank of India (RBI) for only one year, a shorter period than the bank’s board had recommended. Additionally, the recruiters will seek replacements for deputy MD and executive director Arun Khurana, and former CFO Gobind Jain, who resigned on January 17. The bank is also considering appointing a new chief compliance officer and chief operations officer, among others, bringing the total number of roles to be filled to eight.
This leadership overhaul comes at a critical time for the private lender, which has faced a series of setbacks in recent weeks. On March 7, the RBI's decision to extend Kathpalia’s tenure for just one year raised concerns about the bank’s long-term stability. This was followed by the bank’s disclosure on March 10 of lapses in its derivatives accounting, further denting investor confidence. As a result, IndusInd Bank’s shares have fallen over 6% in the past five trading sessions and more than 32% so far this year.
The upcoming leadership changes are seen as an effort to restore investor trust and stabilize the bank’s operations. Market analysts suggest that securing experienced leadership through global recruitment giants could help the bank navigate its current challenges and set the stage for future growth. However, the short-term market sentiment remains cautious, with investors keeping a close eye on how swiftly and effectively the bank executes this transition.
