How do I check for malware on my iPhone?

If the phone was locked, they couldn't have put anything on it. The fact that your battery is draining could have a number of causes. Start troubleshooting that by going to Settings>Battery and seeing what is using the battery.

You can check some things here:

Safety Check for an iPhone with iOS 16 or later - Apple Support

And more generally:

Personal Safety User Guide - Apple Support

Keep the iPhone updated to the latest iOS always and never Jailbreak. That's it.

iOS / iPadOS devices cannot be infected with Viruses / Malware / Spyware *** unless you have intentionally downloaded spurious software or unauthorized apps directly from the internet and installed them on your device, or have Jailbroken. 

It (Hacking) also depends on how careful you are in sharing sensitive and valuable information about your iPhone, such as Passcode, Password, etc, with your friends and family members.

Be judicious when sharing the device's sensitive and valuable information with friends and family members.

**The primary reason for this is Sandboxing. All third-party apps are “sandboxed”, so they are restricted from accessing files stored by other apps or from making changes to the device. Sandboxing is designed to prevent apps from gathering or modifying information stored by other apps.

Security of runtime process in iOS and iPadOS - Apple Support

The sandbox on an iPhone is a security feature that creates a restricted environment for each app to run in isolation from other apps and the operating system. It is a core component of iOS's security architecture and plays a crucial role in making iPhones more secure.

The thief would have had to have known your passcode to even get into the phone, and the installation of any new software would require that the thief know your Apple ID and Password.

But, something is fishy here. Things don't add up.

How did the thief locate you to return the phone?

How long did the thief have the phone?

Why did the thief return the phone to you? Doesn't seem likely that a thief would be an honest person wanting to do the right thing

Did the thief ask for money or a reward to return the phone?

Tell us about the whole scenario in step-by-step detail, as there has to be more to this than you have told us.

For battery draining, first report the Battery Health at Settings > Battery > Battery Health & Charging > Maximum Capacity. The battery graph you want visible is the green one. Then post the screenshot showing your Battery Graph and the top apps using the battery with the last 24 hours option selected at Settings > Battery.

Even if the phone was not protected by a passcode and the "thief" knew your Apple ID and Passcode......it would take anywhere from 20-30 minutes on average for a bad guy to install malicious software on your phone (from his laptop which would have been connected to your iPhone with a cable).

Thankfully, an honest person saw the phone drop and returned it to you immediately.

You have nothing to worry about.

Jez_11 wrote:

Thank you. I had tried both earlier and I am not sharing data with anyone and the battery usage isn't showing anything other than my usage. It is just draining way faster than normal.

The battery usage should show you which apps are using the battery. Can you post a screenshot of what you see?

I have blacked out some of the apps because I'm not willing to publicly admit to which games I spend too much time playing.