Indian startups are already getting worried due to the crisis of Silicon Valley Bank, Signature Bank and now First Republic Bank in America. At the same time, it is a prayer that more banks do not sink, otherwise companies like TCS and Infosys will suffer huge losses.
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The news of the sinking of America’s Silicon Valley Bank and Signature Bank has already put Indian startups on edge. The Government of India also estimates that up to $1 billion of Indian startup companies may be stuck in American banks. At the same time, the fear of loss to TCS and Infosys is also increasing. With this J. P. Morgan shared a note on Friday.
Analyst firm JP Morgan says that a lot of money of India’s two big IT companies Tata Consultancy Services and Infosys is in the regional banks of America. At present, many regional banks of America are facing crisis, which can also become a cause of trouble for TCS and Infosys.
Risk on 2 to 3 percent of revenue
J.P. According to Morgan, 2 to 3 per cent of TCS and Infosys’ US earnings are at risk. His money is in the regional banks there. In such a situation, if the condition of the Regional Bank of America worsens, then it may affect TCS and Infosys.
The drowned Silicon Valley Bank is also the money of both the companies. Its impact will be the most on TCS, while other companies like Infosys and L&T Midtree will be slightly less. It can range from 0.10 percent to 0.20 percent of the revenue of these companies.
Separate amount will have to be arranged
J.P. Morgan says that when these three companies will prepare their financial results in the fourth quarter (January-March), then they will have to make a separate provision in the accounts for this revenue.
The Indian IT industry is already facing challenges in its major markets Europe and America. The earthquake-like situation in the macroeconomic conditions of both these markets has had an impact on the revenue of Indian IT companies.
America’s Silicon Valley Bank drowned
Silicon Valley Bank, which primarily funds startup companies, has recently sunk. US regulators have seized a total of $ 209 billion in bank assets and $ 175.4 billion in deposits.