ANALYSIS Can Rajiv Anand put IndusInd Bank stock back in the Nifty50 universe?

If these are any examples to go by, the road ahead of Rajiv Anand too may not be a bed of roses.

Rajiv Anand may have just gotten out of the eight floor of One World Center after finishing his first day at work as the newly appointed MD & CEO of IndusInd Bank. Tower 1 of this centrally located plush commercial real estate houses the corporate office of the bank.

Incidentally, IndusInd Bank stock was up 1.6 percent in Monday’s trade reacting to a positive credit rating action on the bank’s debt. But this cheer may be a one off considering that the task ahead of Anand is clear– clean up, more clean up and setting the processes right, something has been happening in the banking sector from 2020. It started with Yes Bank and four years later in Bandhan Bank. These banks too were incidentally part of the Nifty50 index in their prime days and despite a completion of a supposed clean up, they are yet to rejoin the list of top 50 companies by market capitalization.

The question ahead of Anand, is whether as the chief of the fifth largest bank, can he outperform his peers on this front? Can he position IndusInd Bank stock back in Nifty50 stock index, India’s premium bellwether benchmark index and one which foreign investor closely track for the purpose of rebalancing their weightage in the country and in blue chip stocks?

To put things in perspective, from September 30, 2025, IndusInd Bank stock might no longer be a part of this coveted index, a position that IndusInd Bank stock has held since 2013.

Past instances of crises

Yes Bank, Bandhan Bank and IndusInd Bank have another aspect in common – they were (or are) faced with the most severe crisis of confidence. In case of IndusInd Bank, the commentary so far from the management has been that FY26 may end as one of the toughest years faced by the bank. As a former CEO of a private bank puts it, the first term of any CEO is spent identifying the magnitude and depth of pain and cleaning up the past mess. Anand’s experience may be no different, he says. “The first term would invariably be consumed in gauging the extent of pain in the book and one can never be sure that the past is behind till the newly built book starts reflecting well. It’s only by end of year three that you’ll start finding convincing green shoots of stability and growth convincingly restarts from year four,” he explained.

RBL Bank is another example to add to this trend, though in some ways it may be appropriate to add Axis Bank and ICICI Bank also to the list. “Among these names, you could say Sandeep Bakshi had a slightly easier task in hindsight, but he was extremely cautious till early 2021 especially on growth. He didn’t want to ‘onboard’ fresh issues,” said a banking analyst from a foreign brokerage. Sandeep Bakshi, took charge as MD & CEO of ICICI Bank in October 2018. He says it wasn’t very different for Amitabh Chaudhry of Axis Bank. “When he took charge on January 1, 2019 as the bank’s MD & CEO, he was clear that he wanted to make the balance sheet very granular and credit cycle-proof. Simultaneously a lot of process were being redone. Despite taking over a stable franchise, you could say the first 3 – 4 years of Chaudhry was consumed in clean up,” the analyst explained.

Repeat of Romesh Sobti

If these are any examples to go by, the road ahead of Rajiv Anand too may not be a bed of roses. His initial priorities may be to set up his A-team and rework processes at the bank, across businesses; exactly the task which was ahead of Romesh Sobti when he took charge as MD & CEO of IndusInd Bank in February 2008. A team of bankers from ABN Amro, Royal Bank of Scotland and ANZ Grindlays, all Sobti’s alma matters, were quick to join him (Sumath Kathpalia, the former CEO of IndusInd Bank was one of them) and the years that followed from 2012 – mid-2019 was nothing short of eye-popping growth. From being known as just a commercial vehicle lender, predominantly catering to Ashok Leyland, IndusInd Bank repositioned itself as a full-suite bank with equal importance given to retail and corporate banking.

Relatively Rajiv Anand has a simpler job; he doesn’t have to reestablish the bank and enjoys the positioning of being the fifth largest bank among private names, with no immediate competition. He will have to quickly build his team, rework processes and get the show restarted.

Being a process oriented person and a friendly boss to work with, as his former colleagues say, investors will keep a very close watch on the progress he makes. All eyes would also been on the Rs 10,000 crore of proposed equity raise to symbolize confidence capital seeping into the bank.

For now, trading at less than FY26’s estimated book value, odds are not in favour of IndusInd Bank. “In our view the first priority of the CEO will be to de-risk and consolidate the balance sheet given the current issues. Accordingly, we expect growth and ROA/ROE trajectory to remain sub-par in the near term,” says Suresh Ganapathy, MD & head of financial services research at Macquarie Capital. Can Anand prove his critiques wrong in less than three years?