Indian Overseas Bank to raise $2 bn through MTN

Also to look at rights issue, FPO to raise Rs 2,350 cr to support its 18-20% growth target in FY14

Indian Overseas Bank (IOB) has said it will look at raising $2 billion through medium term note (MTN) and said it would also look at rights issue and FPO to raise around Rs 2,350 crore to support its 18-20 per cent growth target during the current fiscal.

M Narendra, chairman and managing director, IOB said it depends on market situation as to whether the Bank will look at raising the money in different tranches, with $250 million each.

"We are looking at raising funds through MTN (about $2 billion), and around Rs 2,350 crore through rights issue and public issue to support our growth target of 18-20 percent this fiscal." Naendra said that for every $500 million the bank raises, its overseas credit will increase by around Rs 2500-3000 crore.

It may be noted that the bank was expecting the government to infuse additional capital this fiscal after giving Rs 1,000 crore capital last year.

Narendra said that the bank had requested the government, which is the major shareholder, for a capital of Rs 1,500 crore last year.

Earlier, Narendra said that the bank had done an internal study and it was estimated that around Rs 10,000 crore capital would be required up to 2018-19. The money will be raised from the government, through QIP, rights issue, preferential allotment.

On Restructuring

Speaking to reporters after announcing the bank's Q4 performance, Narendra said the incremental restructured amount was less than Rs 3,000 crore and total restructured loans rose to Rs 18,049 crore from Rs 15,607 crore from a year ago.

From the restructured amount set for the full year, the Bank had a default of Rs 757 crore only, said Narendra, and around 97% of that amount  is performing.

“We have been maintaining this for the last three years and it is much less than the industry,” he said.

During the quarter, while slippage in the international business was around Rs 368 crore, in domestic it was around Rs 1,100 crore.

Some of the key accounts restructured during the quarter include Suryajyoti, Moser Baer, Rolex, NITCO , Sujana, Mahavir Ferro Alloys. Restructuring of Suzlon Group and Moser Baer was around Rs 116 crore and for Sujana Group is around Rs 152 crore.