ICICI Bank emerges biggest winner through Essar-Rosneft deal

ICICI Bank remained strongly bullish on Dalal Street and surged more than 7 per cent on bourses and closed at Rs 258.55 on an intraday basis. After transaction of Essar-Rosneft deal the bank will be the frontrunner in terms of overcoming bad loans. ICICI Bank’s exposure to Essar promoters via Essar Global is around Rs 6000 crore.

Essar is planning to reduce its group debt of Rs 90000 crore by more than 50 per cent using the Rosneft deal that it will receive in the all-cash deal. According to ICICI Bank’s management, the deal is also a significant step in the process of deleveraging the balance sheets of Indian corporates. ICICI Bank has been closely working with various companies including the Essar group to help them deleverage their stressed balance sheets.

On the asset quality front, ICICI Bank’s gross NPA is amounting to Rs 27194 crore in Q1FY17. The bank’s net NPA stands at 5.87 per cent to Rs 15041 crore in Q1FY17.

Most of the banks have declared their exposure towards Essar Group’s company Essar Steel as a bad loan. If promoters are willing to infuse capital, then banks would be willing to take some haircut under the S4A scheme. This would be the largest case of NPA resolution for the system.