Idbi Omni Bond Collects Rs 51cr On Day One

Industrial Development Bank of India (IDBI) has collected Rs 51 crore on the first day of the opening of its omni bond series. The issue had two instruments - a fixed coupon bond and a floating rate bond - with tenures of five years.

The fixed coupon bond carries an interest rate of 13.5 per cent, ,while interest on the floating rate bond is 50 basis points over the yield on 10-year government paper. However, the floating rate paper has a floor on the interest rate at 13.25 per cent.

With the institution being able to raise funds at 13.5 per cent, when corporates like Reliance have to pay much higher, indicates that IDBI will always get funds at rates finer than other entities, said an IDBI official.

 

There was, however, some amount of resistance from certain banks to pick up the IDBI issue.

According to them, interest rates are bound to move up and hence they do not want to get locked with the IDBI bond at a low rate.