Idbi Ties Up $150m Loan From Japan Exim Bank
The Industrial Development Bank of India (IDBI) has tied up a $150 million line of credit with the Export Import Bank of Japan for financing Indo-Japanese joint venture projects in India. This was done in 1997-98 following the government of India's approval of increasing external commercial borrowing limit of $300 million.
The credit line has a weighted average maturity of eight years. In July 1997, the IDBI exercised it call option on the $100 million five-year floating rate notes due 1999 and refinanced the same for the unexpired maturity of two years by way of a syndicated loan at a finer rate.
Last year, the bank also introduced the dollar-denominated single currency pool (SCP) loan scheme, as the demand for foreign currency loans became more market-driven and the existing back-to-back system of lending for foreign currency sources was not suiting the requirements of its clients. Besides, during the year, the bank's assistance under the direct finance products jumped by a whopping 53.6 per cent to Rs 22,860 crore against a corresponding decline of 50 per cent in indirect finance and refinance to Rs 373 crore.
Disbursements under these products also registered a decline of 50 per cent to Rs 334.9 crore.
Similarly, sanctions under bills finance were 34.1 per cent lower at Rs 906.6 crore while disbursements declined by 31.8 per cent to Rs 624.5 crore.
The jump in direct finance has been attributed to a 65.2 per cent hike in project finance products, accounting for Rs 14,902.2 crore.
The spurt in project finance sanctions is principally attributable to increase in assistance to infrastructure projects which increased almost four-fold to Rs 8,197 crore. Assistance to four infrastructure constituents (power, telecom, roads and ports) during the year comprised 33.9 per cent (14.8 per cent) of overall sanctions.
Under direct finance sanctions of foreign currency loans grew at a faster pace of 75.2 per cent to Rs 4523.8 crore relative to rupee loans which increased by 30.8 per cent.
Underwriting assistance came down significantly by 77.5 per cent to Rs 71 crore as most of the projects placed less reliance on public issues for raising equity capital.
Disbursement under direct finance products recorded an increase of 44.2 per cent to Rs 14,147 crore. Disbursements under project finance projects registered a 12.6 per cent growth to Rs 8142.2 crore. The somewhat moderate growth in disbursements vis-a-vis sanctions under project loans is primarily due to the fact that infrastructure projects, which accounted for a significant share in sanctions under direct assistance take a longer time to fructify into disbursements.