Icici Lines Up Rs 5,000cr On-Tap Bond Issue

Industrial Credit and Investment Corporation of India (ICICI) has got itself rated for a Rs 5000-crore on-tap bond programme, which includes the Rs 300 crore retail bond issue to floated by the institution.

The on tap issue will help ICICI to raise funds as and when required, to meet mismatches or sudden demand for credit. Credit Rating Information Services India Ltd (Crisil) has given the top rating triple A for the issue. All the other outstanding ratings have been reaffirmed triple A by Crisil.

ICICI has four outstanding bond issues, two of Rs 2000 crore, one each of Rs 400 crore and Rs 500 crore.. It has Rs 500 crore worth of certificates of deposits programme and a Rs 1100 crore short term deposit programme.

Crisil states that the AAA ratings assigned to the earlier bond issues and certificates of deposits of ICICI have also been reaffirmed indicating the highest safety regarding timely payment of interest and principal.

The rating also factors the increasing competition arising out of increasing deregulation of the Indian financial sector, constraints in diversity of resources, inherent risks in project financing activities and pressure on asset quality.

ICICI has decided to increase debt liabilities by Rs 35,000 crore. The rapid increases in the asset portfolio of ICICI and projected large scale funding of infrastructure projects makes an expansion of its networth imperative.

However, ICICI which has gone through quite a few equity dilutions, does not want chip shareholder value any further, hence the decision to increase networth through preference shares.

At present the authorised capital of ICICI is Rs 750 crore consisting of equity capital of Rs 600 crore, preference capital of Rs 100 crore and unclassified share capital of Rs 50 crore. The authorised capital is sought to be increased to Rs 1600 crore through a special resolution at the annual general meeting to be held on September 12, 1997.

ICICI is increasing its borrowings limit by Rs 35,000 crore to Rs 75,000 crore. The earlier limit of ICICI when it was not amalgamated with SCICI Ltd was Rs 25,000 crore.

Consequent to the merger ICICI's aggregate limit increased to Rs 40,000 crore.

Considering the present and future requirement the board felt that the limit on the total amount of outstanding borrowings be raised to Rs 75,000 crore. Currently the loan funds stand at Rs 29,393 crore, which is short by ICICI's borrowing limit of Rs 40,000 crore by a little above Rs 10,000 crore.

With the large infrastructure projects in the pipeline, this limit is expected to be exhausted very soon and hence the resolution to increase the limit to Rs 75,000 crore.

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Mumbai -- The ICICI board has rejected the demand to one of the shareholder and chairman of Shareholders' Welfare Forum, Shyam Sundar Gupta to be director of the company.

Gupta in a letter dated January 18, 1997 gave notice proposing himself as a candidate for the office of the director of the company.

The notice to the ICICI AGM states, "Gupta claims to be a businessman dealing in shares and investment and claims to the founder chairman of Shareholder's Welfare Forum which, he claims, is providing protection to shareholders."

"The resolution for appointment of Gupta as director is being included in the notice of the AGM as required by law. The board at its meeting held on July 28, 1997 considered the notice received from Gupta and decided not to extend its support to the resolution," the notice to the AGM stated.