IndusInd Bank faces challenges as microfinance sector tightens lending norms

IndusInd Bank's shares fell to a 52-week low of 965.55, down 38% in 2024, largely due to challenges in the microfinance sector. The bank reported an 18% increase in slippages in microfinance lending, raising its non-performing assets to 6.5%. The MicroFinance Institutions Network will tighten lending norms starting in January, which may further impact IndusInd. The bank has reduced its microfinance loan book from 39,192 crore to 32,723 crore, focusing more on secured lending. Despite a lower price-to-adjusted book value compared to peers, IndusInd's annualized return on assets remains at 1%, below the industry average. Analysts have cut earnings estimates and target prices for the bank in recent quarters.