Idbi Omnibnond Hikes Coupon To 13.75 Per Cent

The Industrial Development Bank of India (IDBI) has hiked interest rate on its bond for five years by 25 basis points to 13.75 per cent in its new series of Omnibond issue.

The Omnibonds, which opened yesterday for subscription, will offer 13.75 per cent interest against the 13.50 per cent the financial institution offered in its last Omnibond series.

The financial institution is targeting to raise an initial amount of Rs 500 crore with a 100 per cent green shoe option.

The new series of the Omnibond issue offers four instruments which have a maturity of one, three, five and seven years.

The bond having a one year maturity will offer an interest rate of 12.50 per cent, bonds maturing in three years will offer 13.25 per cent, bonds maturing in five years will offer 13.75 per cent and for seven years, the interest offered will be 14 per cent.

None of the instruments offered under the new series will have any put and call option. In fact, the Industrial Credit and Investment Corporation of India (ICICI), which is also in the private placement market, is offering 14 per cent for 5 years. The

ICICI retail bond issue, which will open in a week's time, will also offer 14 per cent for 5 years.

This bond is the second private placement done by the Industrial Development Bank of India in the current fiscal. In the first private placement, IDBI managed to raise nearly Rs 300 crore against the targeted sum of Rs 500 crore, said sources from the FI.

The instruments offered by the FI will require subscription of Rs 25,000 and the minimum subscription of five bonds.

Meanwhile, IDBI is expected to go ahead with its first series of Umbrella bond issue in the first week of August.

This issue is aiming at raising an initial amount of Rs 500 crore with a 100 per cent green shoe option.