Due to the bankruptcy process of low cost airline Go First, there has been a big decline in the shares of public sector banks. Due to the fall in the shares of Central Bank of India, IDBI Bank and Bank of Baroda, more than Rs 7500 crores of these banks have sunk. According to statistics, the total investment of these three banks in Go First is more than Rs 3,000 crore. The shares of these three companies have seen a decline of 7 per cent during the trading session. Let us also tell you that how much damage has been done to these public sector banks?
Big loss to public sector banks
- Due to the crash of Go First, there has been a big fall in the shares of public sector banks. Shares of Bank of Baroda closed at Rs 184.75, down 1.78 per cent, and also went up to Rs 180.90 during the trading session. Because of which the bank has suffered a loss of Rs 3904 crore.
- On the other hand, there has been a big decline in the shares of Central of India. According to BSE data, there has been a decline of 5.13 per cent and closed at Rs 28.65, although the company’s stock also reached Rs 28.16 during the trading session. The market cap of the bank has seen a loss of Rs 1,780 crore.
- IDBI Bank shares closed at Rs 53.73, down 1.76 per cent. The company’s stock also went up to Rs 53.20 during the trading session. Because of which the banka market cap sank by Rs 1,828 crore.
- If the loss of market cap of all three banks is combined, then the total loss is sitting at Rs 7,512 crore.
Many banks made huge investments
- According to the information given to NCLT by GoFirst, the total borrowings on the airline is Rs 6,521 crore.
- Central Bank of India, Bank of Baroda and IDBI Bank have invested Rs 3,051 crore in three public sector banks of the country.
- Central Bank of India has invested Rs 1,562 crore in Go First.
- Bank of Baroda has invested Rs 1,430 crore.
- Deutsche Bank has invested Rs 1,320 crore in the airline.
- IDBI Bank has invested Rs 59 crore in Wadia Group’s airline.
- Axis Bank’s investment in GoFirst is Rs 30 crore.
- Other financial companies have invested Rs 1200 crore in the airline.
American company accused
On Tuesday, the CEO of Wadia Group’s airline Go First gave a statement, in which it was said that the airline is canceling all flights from May 3 to 5 due to non-payment of debt by oil companies and cash crunch. After that the company announced to go for Voluntary Insolvency Proceedings. The airline accused American-based company Pratt & Whitney that due to faulty engines, the airline had to keep more than half of its aircraft grounded, due to which it had to suffer losses.