Banks can avail CRR exemption for 5 years for incremental credit extended to auto, housing, MSME between Jan 31-July 31, 2020. Good for Idfc first
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Vodafone exposure makes 11% of idfc first banks networth. Its has already corrected 13% since than. Is it a bottom or will take support at previous lows
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Does anybody know whether they might need to take more than 50% hit on their loans to Idea?
Do we have any links to the RCom resolution and how much did banks get back?
As far as valuations go I would say that 0.9x to 0.8x book value makes sense because of the landmines in the loan book. Donāt think it can trade at these expensive valuations.
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As stock prices are going down it seems only idfc first bank did landing to Vodafone Idea. No other banks did provision yet for Vodafone account.
As Bank has already taken 50% provision (1600 cr) in last quarter result. it has to take 25% (800 cr) more incase Vodafone Idea declared as NPA. I think VV will take partial 20-30% of provision (of remaining 800 cr provision) in upcoming quarters to manage this legacy stressed telecom account. Here not only idfc first bank but also all other banks will suffer. SBI, Kotak, HDFC all have big exposure in Vodafone Idea.
I do not think Govt will let Vodafone Idea company to go down. There should be minimum 3 private player for vibrant telecom industry and job creation. Just imagine how many jobs will be lost if Vodafone Idea telecom bankrupt.
We should not ignore idfc first retail sector growth and making 650 cr+ operating profit. No big stressed account in watchlist right now. These type of up down is part of business in banking sector.
Itās short term pain for long term investors. It will soon phase out and stock will start performing before next quarter result.
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Timing of investment is important in markets. The bank has been consistently giving negative eps, which again might happen even in current quarter because of provisions, and the investors only ray of hope seems to be VVs legacy of turning around businesses and itās fast expanding retail franchise.
The question is how long before the bank turns black. The stock has been highly volatile with negative returns since ipo. Early investors who have lost money has gained a valuable experience of patience in this stock. But those who havenāt learned the lesson will soon exit at a loss.
Reminds me of Ramesh Damanis famous quote āMarket is a place where people with money gains experience and those with experience gain moneyā 
Disclosure: invested but not accumulating more
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Supreme Court judge apparently flared up at the indignity perpetrated by a desk officer, who is not even a group A officer, issuing a letter virtually staying the SC judgement on AGR dues. Telecom ministry has clearly mishandled the issue. Secondly Telecom Dept wanted to hunt with the hounds and now run with hare too. If they approach the SC again and transparently put the situation along with laying out possible options, I am sure SC will give them enough leeway to solve the issue without causing bankruptcy of Voda Idea and resultant debt contagion of banks and receivables of Govt. Not forgetting loss of tens of thousands of jobs and ensuing misery. After all, SC judges would certainly like to help the economy, help the banks get their money back and save tens of thousands of jobs.
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What will be impact if AGR paid by VODA/IDEA ā¦Though they gave warning to move out of telecom ā¦
Will it have positive impact on banks having exposure to them n also competetor Jio /Airtel
Yes. It should have a positive impact on bank stocks tomorrow. Most of the people were expecting a default for vodafone idea as per the previous statements. But even the intent of paying is very positive for both banks and voda/idea group. Also, govt. might also come out with a plan to ask the companies to pay the total money in installments as nobody would want a duopoly plus failing of voda/idea group means risk of a lot of jobs. It donāt think govt can afford this at this point of time.
Letās see how it pans out in next couple of weeks.
After seeing all this, it seems Idfc first only landed to Vodafone/Idea and bank only have 1 account to do business, no talk about retail business transformation and growth, deliberate attempt to create negative sentiment. It has done 50% provision. Now no worry to idfc first. Other banks will take big hit if Voda/Idea account declared as NPA.
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May be there are lot of opportunities available in the market, the likes of API, chemicals, pharma, EV, FMCG etc which are having good rallyā¦ Here the bank may not give good return in a yearā¦ May be thats y people are running away from the counterā¦ We know VV is building bank for long term and he is taking steps in that direction but he should also not test investors patienceā¦ It would be very difficult for the share to run with such huge equity if it goes out of flavourā¦
Discā¦ Invested
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Looks like the 500cr Orissa thermal plant in the watch list has been sold. Now that itās been bought by JSW debt repayments should happen on time, plus bank will get some small amount for its equity stake. Positive.
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IDFC has already sold its stake to GIP at a very low valuation. whatever JSW pays to GMR will go to GIP.
This wasnāt a stake owned by IDFC Alternatives, IDFC Bank directly owned around 3-4% and also had debt exposure.
Check watch list point no 5. Idfc first will recover this amount from JSW after successful acquisition.
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True they own 2-3%. My mistake. They have tag along with GIP. whatever value GIP gets, IDFC Bank also will get from the stake sale proceeds.
Recent Crisil report https://www.crisil.com/mnt/winshare/Ratings/RatingList/RatingDocs/IDFC%20FIRST%20Bank%20Limited_February_18_2020_RR202002181048.html
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VVs fairly confident of turning black in Q4. However, heās guiding for profits not exceeding 100-150 crores over the next few quarters. Let us hope that quality growth continues.
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Could you please share the link as well?
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