No problem on the retail front – V. Vaidyanathan, IDFC Bank

No problem on the retail front – V. Vaidyanathan, IDFC Bank

Excerpts from an interview of Mr. V. Vaidyanathan, Managing Director, and Chief Executive Officer, IDFC First with CNBC-TV18:

Update on the Indian Equity Market:

On Wednesday, NIFTY ended positive at 12,130 (+1.2%). The top gainers in NIFTY were Bharti Infratel (+7.0%), Grasim (+4.4%) and Coal India (+3.5%). Whereas Tata Motors (-2.2%), JSW Steel (-1.40%) and Sun Pharma (-1.32%) were the top NIFTY losers. All the sectors were in the green. The top sectoral gainers were pharma (+2.32%), Media (+1.94%) and FMCG (+16.4%).

  • Speaking about telecom exposure of the bank, Mr. Vaidyanathan said the total exposure to telecom is ₹ 5,900 crore out of which ₹ 2,700 crores are for Bharti Airtel and Jio together and ₹ 3,300 crore exposure for Vodafone on which the bank has taken 50% provision.
  • He says, out of the names other than Vodafone, there is nothing to worry about. Except for the telecom sector the total exposure on the watch list is roughly ₹ 3,500 crore, which the bank is tracking on a quarterly basis.
  • Out of the ₹ 3,400 crore watch list the bank has taken 51% provisions. The bank has exposure to Reliance Capital, Dewan Housing Finance Ltd (DHFL), and SICAL.
  • The bank has provided 75% provisions to Reliance and DHFL.
  • The bank has got ₹ 825crore on legacy watchlist accounts.
  • Out of the ₹ 51,000 crore book, close to 40% is MSME book, 49-50% is the consumer financing book and close to 11% is housing finance. For the bank, each one of these three segments are behaving very well.
  • Mr Vaidyanathan said people connect anything with anything, there are worries like coronavirus and some trade delays as well but, coronavirus has got nothing to do with secured and unsecured in India.
  • On the retail front the bank is not having any problem.

Consensus estimates:

  • The closing price of IDFC First Bank was ₹ 40/- as of 19-February-2020. The consensus target price for the bank is not available.
  • The bank reported a loss for the year ended 31st March 2019 of ₹ 4.7 per share. The reported loss for nine months ended 31st December 2019 stood at ₹ 6.10, which was ₹ 4.39 for nine months ended 31st December 2018.


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