Idbi Seeks Nod For Rs 5000 Crore Bond Issue

IDBI has filed an umbrella prospectus with the Securities and Exchange Board of India (Sebi) for a Rs 2,500 crore flexibond issue with a 100 per cent greenshoe option.

The institution will come out with its first issue of Rs 500 crore flexibond issue in early November with a greenshoe option of a similar sum. It has not finalised the rate of interest on the instruments.

"The exact timing of the issue will depend on the credit that the institution will face and the stance of the Reserve Bank of India's mid-term monetary policy. We are also waiting for some sort of stability in the market before fixing the rate of interest," said a source.

 

The Suvidha deposit scheme of the institution has also been picking up in the last few months.

IDBI has garnered around Rs 200 crore through this scheme this fiscal. It is targeting Rs 1,000 crore by the end of the fiscal through this scheme. Sources said the deposit plan has been picking up after the concession given by the RBI like delinking the interest rate from the State Bank of India deposits rates, lowering the lock-in period to one year from three years.

In a move to bring down its high-cost borrowings, IDBI will redeem bonds of Rs 3,000 crore this fiscal. Of this, a major chunk of around Rs 2,000 crore will be redeemed on March 31, 2002. The FI is using the option to call back the Flexibond 1992 issue which was raised at 15.5 per cent.

It is also set to redeem its omni bonds where there are call options. The incremental cost of funds has come down to around 10.1 per cent from 11.1 per cent the previous fiscal.

IDBI had redeemed bonds of more than Rs 3,729 crore in fiscal 2000. This measure itself is set to increase the FI's bottomline by Rs 200 crore in the current fiscal.