IndusInd Bank shares crashed over 6% on Monday as the company announced the reappointment of its CEO. Several global analysts including Morgan Stanley, JP Morgan, Citi and Jefferies weighed in on the lower than expected tenure extension.

What Happened: IndusInd Bank last week announced that the re-appointment of CEO Sumant Kathpalia as Managing Director & CEO was approved by the RBI. Kathpalia will continue in his position for two more years. It is worth noting that the company’s board had approved a three-year extension for Kathpalia. A career banker Kathpalia has been part of the IndusInd for around 15 years.

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Global Analysts had a mixed reaction to the news. JP Morgan downgraded the stock’s rating to ‘netural’ and cut down the target price significantly to ₹1,060 from ₹1,400. Morgan Stanley on the other maintained its ‘overweight’ rating for the stock with price target of ₹1,525. The firm in its note said that it is difficult to know the reason behind the less than expected extension.

Citi also maintained its ‘buy’ rating with a target price of ₹1,420. The firm said that it will not react at this juncture and is keenly observing the bank’s progress. Jefferies also maintained the ‘buy’ rating for the stock with a target price of ₹1,550. Commenting on the RBI decision, the firm said that the central bank might be looking towards the bank to improve its internals controls and funding.

Price Action: Shares of IndusInd bank were down 6.25% to trade at ₹1,073.95 in the early hours of trading on Monday.

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