The collapse of debt-ridden Vodafone Idea (Vi) will hurt IDFC First Bank the most among lenders as it has Rs 3,244 crore exposure which stands around 3 percent of its loan book. The stock price of the bank has also taken a beating amid concerns over the Vi staying afloat.

However, the bank believes it will be able to deal with the situation even if Vi’s total exposure is lost as it has a focused balance sheet and raised capital that has helped keep the books clean.

Speaking to CNBC-TV18, V Vaidyanathan, MD and CEO, IDFC First Bank, said that the government was serious w.r.t finding a resolution for Vodafone Idea.

“Out of the total Rs 1.8 lakh crore debt of Vodafone Idea, close to Rs 1.55 lakh crore is owned by the government itself either in form of AGR or spectrum dues. So, I think it is a very significant interest to the Government of India to keep this relationship and keep the telecom sector alive. The government will think very seriously about it, very smart people there, they will solve the problem,” said Vaidyanathan.

When asked if one were to assume the worst case, then what was the bank’s exposure and whether it has the capital and the reserves to meet it?

Vaidyanathan said, “So we have Rs 2,000 funded exposure and Rs 1,244 crore of non-funded exposure. And if we imagine the worst case, let's say 100 percent loss, even if you take a full Rs 2,000 crore, our capital adequacy will be 14.6 percent. So, we have a pretty focussed balance sheet and we will deal with this issue.”

So if we took the funded and non-funded exposure together then it would be Rs 3,244 crore, but then you’ve got to divide that by the total funded and non-funded exposures. So, it would be a bit over 2 percent, he added.

Watch the accompanying video for the full interview

(Edited by : Ankit Gohel)

First Published:Aug 13, 2021 2:31 PM IST