(Bloomberg) --
IndusInd Bank Ltd.’s shares headed for a record plunge as the recent government-backed rescue of peer Yes Bank Ltd. soured sentiment for other Indian private lenders.
The stock tumbled 30% as of 1:58 p.m. in Mumbai Wednesday, the worst performer on the S&P BSE Sensex, despite the bank refuting “irresponsible rumors and speculation” around its share performance in a statement late Tuesday. A gauge of bank stocks slumped as much 8.8%, as heavyweights including Kotak Mahindra Bank Ltd. and Axis Bank Ltd. slid.
Curbs imposed on Yes Bank lift at 6 p.m. Wednesday, and the Reserve Bank of India urged depositors to keep faith in the lender, while assuring that authorities stand ready to provide liquidity if needed. IndusInd is one of the biggest lenders to India’s telecom sector, which on Wednesday failed to persuade the Supreme Court to offer relief in the payment of $19 billion in fees to the government.
“The stock is coming under pressure as investors are now worried about its exposure to the telecom sector,” said Abhimanyu Sofat, head of research at IIFL Securities Ltd. in Mumbai. “There are challenges for smaller lenders and non-bank finance companies to access liquidity
IndusInd Bank remains financially strong, well-capitalized, profitable and is “a growing entity with strong governance”, the bank said in a statement Tuesday. The bank’s shares have crashed more than 70% so far this year.
Representatives didn’t immediately reply to a request for comment Wednesday.
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