Sidbi Scrips Plan To Mop Up Rs 1500 Crore In Fiscal

The Small Industries Development Bank of India (Sidbi) has drawn up plans to mobilise Rs 1,200-1,500 crore for funding its operations in fiscal 2001-02.

It has also decided to exercise a call/put option on its deep discount bonds (DDBs) which were issued in 1992.

The DDBs, which have a tenor of 25 years and carry an interest rate of 16 per cent per annum, are being redeemed at Rs 9,600 per bond as against the initial face value of Rs 2,500.

Sidbi will exercise the call/put option on February 1, 2002, and it will meet a major portion of the outgo of Rs 665 crore through internal accruals.

 

The DDBs have a call/put option exercisable at the end of the fifth, ninth, twelfth, fifteenth and twentieth years.

Sidbi proposes to bring down its cost of funds from the present 10.75 per cent by raising resources through priority and non-priority sector bonds in the prevailing soft interest rate scenario.

Meanwhile, the financial institution is also close to finalising a 30 million Deutsche mark third (DM) line of credit from German multilateral financing agency KfW, specifically for small scale industry (SSI) projects with clean and green technology.

The line of credit will be repayable over 40 years at 0.75 per cent per annum. It also carries a 10-year moratorium. Sidbi received two general lines of credit on similar terms amounting to DM 65 million from KfW earlier.

P B Nimbalkar, chairman and managing director of Sidbi, said, the Japan Bank for International Co-operation had expressed interest in extending lines of credit for the micro-credit projects (income generating and poverty alleviating activities) in the country which are financed by Sidbi by lending to self-help groups.