Indian Bank to decide on overseas bonds issue next week

Indian Bank would decide next week on its plan to raise $one billion (about Rs 4,500 crore) through the issue of overseas bonds for augmenting its business growth, a top bank official said today.

The bank's shareholders had approved the plan to raise $one billion through medium-term notes (MTN), Indian Bank Chairman and Managing Director T M Bhasin said.

"We have completed the road shows and there is an overwhelming response for the issue as the financials of the bank are (at their) strongest.

"Depending upon the market conditions we will raise the funds. Initially, it will be $350 million to $500 million then we will raise the funds in two tranches...", he told reporters here.

He said that a decision on this regard would be taken later next week and after raising the funds, the bank would be listed in the Stock Exchange of Singapore.

The fund raising is part of the bank's plan to augment its business growth, including the setting up of branches in overseas markets.

"We have filed (with the Reserve Bank of India) for opening three more branches in Sri Lanka and one more in Malaysia," he said, adding the funds raised through overseas bonds would be used for operations in Singapore, Malaysia and Sri Lanka.

"Currently, the business from these regions is about Rs 8,000 crore (and after the fund raising plan) it will go up by Rs 2,250 crore in the loan book side and similar amount in the investment portfolio", Bashin said after announcing the first quarter financial results of the bank.

On the company plans of launching an FPO for raising funds of Rs 1,400 crore, he said the bank would wait for the market conditions to improve.

Bashin said while the bank was ready with the draft red-herring prospectus, he said, "We are waiting for the right time."

Asked whether they would increase the base rate in the wake of RBI hiking the key lending rates by 50 basis points, he said, "Right now our base rate is at 10.25%. We may take a decision to increase it by 0.25% or by 0.50%."