Icici Seeks Nod For Mobilising $500 Million

The Industrial Credit and Investment Corporation of India (ICICI) has sought the finance ministry's clearance to raise $500 million from the overseas markets in the next financial year.

The financial institution is all set to enter the retail debt market with a Rs 750-crore issue in March.

During the next fiscal, it plans to mop up Rs 7,000 crore from the domestic debt market.

Confirming this K V Kamath, chief executive officer (CEO) and managing director of ICICI said, "we have applied to the finance ministry to raise half a billion dollars for the next financial year, and intend to raise Rs 6,000-Rs 7,000 crore as domestic resources in the same period."

 

In fiscal 1995-96, ICICI had budgeted to raise over Rs 9,000 crore through market borrowings.

Of this it raised $400 million through external commercial borrowings while the rest was raised through domestic resources. According to Kamath, the domestic resources will be raised mainly through private placement and public debt issues.

"We intend to raise the majority of the amount through private placement while a part of it will be raised through retail debt issues," ICICI sources said.

In comparison, the Industrial Development Bank of India (IDBI), ICICI's biggest competitor for raising resources from the market, has moved the finance ministry to raise $800 million through the overseas borrowing programme.

The biggest financial institution in India, also intends to raise Rs 10,000 crore through domestic borrowings.

IDBI is all set to enter the private placement market this week, to kick off its borrowings programme for the next financial year.

ICICI which is launching the first-ever index linked bond and the infrastructure bond as part of the Rs 750 crore retail debt issue, is also currently raising $100 million through a subordinate debt issue.

"This will boost our tier II capital requirements significantly and stop us from accessing the capital market for the next three year," Kamath said. A part of the domestic debt issue will also be used to raise tier II capital, Kamath said. However, the size that is to be raised has still not been decided, the ICICI chief added.

The corporationo has also moved the finance ministry with a proposal to raise resources by issuing medium-term notes (MTN).

"We have filed an application with the finance ministry to issue MTNs. The final permission is expected to come through very soon," a senior official at the corporation said.