Ioc Defers Bond Issue

Indian Oil Corporation (IOC) has deferred its Rs 300 crore bond issue in the wake of the recent increase in interest rates. Lead manager to the issue J M Finan-cial yesterday issued a letter to other merchant bankers involved in the issue, stating, It has been decided to defer the IOC issue.

The letter does not explain the deferral, sources said. IOC had planned to raise funds through book-building, and offered a band of 11.75 to 12 per cent.

The issue opened on January 9 and was originally slated to close on January 20. However, the RBI decision to hike the bank rate by 200 basis points to 11% on January 17 signalled a rise in rates across all maturities, which prompted IOC to extend the closing date to February 6.

Merchant bankers said the market was disappointed by the book-building rate of 11.75 to 12%. The higher deposits rates offered by all banks after the RBI measure made the IOC paper even more unattractive. Besides, the tight liquidity prompted cash-rich entities to invest in T-bills which offered 15-25%, sources said.