India’s third-largest telecom operator, Vodafone Idea is now facing accute crisis to manage its debt. It will affect some of the country’s biggest private sector banks if collapsed.
Major factors
The existing promoters of Vodafone Idea refused to infuse further cash in the debt-laden company on the other hand, the Supreme Court’s recent dismissal of a plea for rectification of alleged miscalculation in adjusted gross revenue dues payable by the company to the government.
The resignation of Kumar Mangalam Birla as head of the company and his offer to the government to buy out Aditya Birla group’s stake is likely to further discourage potential investors.
Total debt
The company have a Total gross debt of over Rs 1.8 lakh crore of which at least Rs 28,700 crore to several state-owned and private sector lenders.
Exposure
The highest exposure is with State Bank of India at Rs 11,000 crore followed by Yes Bank at Rs 4,000 crore and IndusInd Bank at Rs 3,500 crore.
However, in terms of percentage of loan book, the biggest hit from Vodafone Idea’s default will be to IDFC First Bank as it has an exposure of 2.9 per cent of its loan book followed by YES Bank at 2.4 per cent and IndusInd Bank at 1.65 per cent.
On the other hand IDFC First Bank has already marked Vodafone Idea as stressed and provided for 15 per cent of the outstanding debt.
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