AGR verdict: SBI, IndusInd Bank slip up to 4% as banks stare at NPA pile-up

Elvera Bartels

Banking stocks, including IndusInd Bank, Axis lender, and Condition Bank of India, tumbled at the bourses following the Supreme Court docket rejected Bharti Airtel and Vodafone Idea’s plea seeking to neogtiate the payment schedule in the AGR circumstance.

Among the individual stocks, IndusInd Bank hit contemporary fifty two-7 days lower, down four per cent, to Rs 1181.1 on the NSE. Moreover, IDFC Initially Bank slipped two.7 per cent, RBL Bank (two.3 per cent), Axis Bank (two per cent), HDFC Bank (1.9 per cent), Federal Bank (1.four per cent), and SBI (1.eight per cent). Of course Bank, on the other hand, ended up trading eight per cent bigger. As for ICICI Bank, the inventory slipped up to .eight per cent, ahead of paring losses to trade .eight per cent bigger.

At eleven:forty one am, the Nifty lender index was trading .seventy two per cent reduced, as in opposition to a .fifteen per cent slip in the benchmark Nifty50 index.

In accordance to a report by Goldman Sachs, Vodafone Idea’s credit card debt excluding deferred payment liability is all-around Rs 28,000 crore, with income and income equivalents of Rs fifteen,400 crore as of September 2019. This interprets to a web exposure of about Rs 13,000 crore which, even however, is not sizeable (or less than two per cent) in the context of in general non-executing loans in the complete banking program, but “would impact trader self confidence and lead to bigger danger aversion amid banking companies in the direction of telcos”.

The world-wide brokerage estimates the individual exposure to Vodafone Concept as Condition Bank of India (Rs eleven,two hundred crore), IndusInd Bank (Rs 3,995 crore), IDFC Initially Bank (Rs two,500 crore), ICICI Bank (Rs 1,725 crore) and Punjab National Bank (Rs 1,027.7 crore). In phrases of exposure, credit card debt offered to Vodafone Concept account for eleven per cent of the IDFC Initially Bank’s networth, and 9 per cent of the IndusInd Bank’s networth, the report additional.

“In common, the exposure of banking companies to the complete telecom sector ranges concerning ten per cent and thirty per cent of their whole fairness with Of course Bank acquiring the maximum exposure (Rs 7,937 crore) of 29 per cent (of its fairness) amongst non-public banking companies. Within just the public sector banking companies, Condition Bank of India has prolonged credit card debt of Rs 36,542 crore (or 16 per cent of its whole fairness). Now if a telco defaults on these payments, it will have impact on not just other telcos but also on the telecom infrastructure firms and the banking program,” the report dated January seventeen observed.

Coming down seriously on the Office of Telecommunications (DoT) for not using coercive motion in opposition to telcos for failing to repay, the apex courtroom purchased contempt proceedings in opposition to Bharti Airtel and Vodafone Concept. The Apex Court docket also pulled up the DoT desk officer who wrote to the Legal professional Typical asking him to not insist on payemnt of dues. The SC issued a contempt detect to the officer to describe why no motion really should be initiated in opposition to him.

The courtroom summoned handling director, director of all telcos including Bharti Airtel, Vodafone Concept and other folks on March seventeen to describe why these dues ended up not deposited regardless of orders and why contempt motion must not be taken in opposition to them for non-compliance of order. Examine Additional

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Voda Idea dips 11% as SC rejects telcos' plea for new schedule for AGR dues

Shares of Vodafone Plan reversed their early early morning gains and dipped eleven for each cent to Rs three.ninety six on the BSE on Friday after the Supreme Court rejected the telcos’ plea in search of new routine of altered gross revenues (AGR) payments. Coming down greatly on the Office […]