IDBI plans to raise $350 million more

IDBI Bank, which raised $350 million (Rs 1,615.95 crore) selling overseas bonds, planned to raise another $350 million in bond sales, loans from multilateral agencies and export credit agencies, Executive Director M O Rego told reporters at a press conference here on Tuesday.

“Depending on our borrowers’ needs, we can access export credit agencies, bank lines and the bond market for raising this capital,” Rego said.

The proposal is part of the bank’s plan to raise a total of $1 billion (Rs 4,617 crore) in the financial year ending March 31. The company had raised $650 million (Rs 3,001.05 crore), Rego said. Lending to small- and medium- enterprises (SMEs) might increase to 10 per cent of IDBI’s total loans this year from seven per cent in 2009, Chief Financial Officer P Sitaram said in an interview on May 21.

The bank’s overseas bonds sale of $350 million got oversubscribed by more than five times last week. The bank sold the bonds maturing in 5.5 years and carrying a coupon of 4.75 per cent to 200 overseas investors on Thursday. It plans to list them on the Singapore Stock Exchange.

The bonds were sold through the bank’s branch at Dubai International Financial Centre for lending foreign currency to Indian companies. The bond sale is part of the bank’s plan to raise $1.5 billion (Rs 6,925.5 crore) in medium term notes.

More than 200 investors subscribed to the bonds, Rego said. About 46 per cent of the bonds were subscribed by investors from Asia, 40 per cent from Europe and 14 per cent by US offshore investors.

Barclays Bank, BNP Paribas, HSBC Holdings, Royal Bank of Scotland and Standard Chartered helped IDBI Bank sell the bonds to global investors. The floating rate pricing of 260 basis points higher than the Libor (London inter-bank offer rate) for a tenure of 5.5 years, is among one of the finer rates by an Indian bank in recent times, officials at IDBI Bank said.