IDBI Bank may hike fund raising via MTN to $2.5 bn

The bank has raised $124 mn (Rs 620 cr) through Swiss franc bond issue in March

Public sector lender IDBI Bank may raise its overseas fund raising plan to $2.5 billion in January from existing $1.5 billion, a top company official said.

"We will update our overseas fund raising plan through medium term note [MTN] programme in January 2013 and logically, we may raise it to $2.5 billion," IDBI Bank Executive Director Melwyn Rego said.

He also said the bank has raised around $124 million (Rs 620 crore) through a Swiss franc bond issue in March.

"We have raised around $124 million from the Swiss market with a maturity of 3.5 years and annual coupon size of 3.125 per cent," he said.

 

As per the officials, the bank has already raised $720 million out of $1.5 billion MTN size and plans to raise $750 million in the current financial year.

Referring to demand for offshore funds, Rego said there was a sound demand for foreign currency loans as of now, which is likely to increase in the future.

"There is sound appetite for foreign currency loans as of now and this is likely to increase in the near future. We also expect some demand from corporates as FCCBs [foreign currency convertible bonds] come for redemption in the later part of the year," he said.

The bank also said it would diversify its borrowing basket to reduce cost incurred in raising these funds.

"We are looking at other markets for raising money through MTN route as we would like to diversify our basket with reduction of cost," Rego said, adding that the fund will be raised in small tranches from various markets.