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IDBI to raise up to $300 mn through Swiss franc bond issue

IDBI to raise up to $300 mn through Swiss franc bond issue
PTI
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First Published: Mon, May 23 2011. 07 16 PM IST
Updated: Mon, May 23 2011. 07 16 PM IST
Mumbai: State-run IDBI Bank on Monday said it has firmed up plans to raise up to $300 million through a medium-term Swiss franc bond issue.
“It (bond issue size) would be between $250 to $300 million...we have finished the road shows and will be deciding on details like the exact amount and timing in the next 2-3 days,” IDBI Bank chairman and managing director R M Malla said on the sidelines of a function here.
The funds raised through the bonds will be used for lending to Indian corporate clients for their ECB (external commercial borrowings) through its branch in the Dubai International Finance Centre, he said.
The bonds will hold a five-year maturity and the bank is expecting to raise the money at 200 basis points over Swiss Franc mid swaps, executive director Melwyn Rego said.
He said the lender will be looking at retail investors to raise the money rather than the conventional practice of tapping institutions which are targeted in such issues.
IDBI Bank has done road shows in Zurich, Geneva and Lugano over the past few weeks for creating awareness among potential investors, he said.
The bank on Monday inaugurated a special safe deposit vault facility at its headquarters in the Cuffe Parade, south Mumbai, which will be open round the clock.
Malla, who christened the facility as ATL (all time lockers), claimed this makes the bank the first institution in the world to offer a 24-hour vault facility.
It will have special security features under which a customer can only get a biometric-based access to the facility while iris scan will be added soon, he said.
”We feel individuals who want to visit some social functions in the evening would be interested to use such a facility. Corporates, who have to securely store things like data devices after completion of work late in the evenings, is another category we will be targeting,“ Malla said.
The bank’s executive director, R K Bansal, said the Goverment lender is targeting a lower-than-industrial-average credit growth of 15-16% for FY 12, but will be concentrating more on the liabilities front for 2011.
It is targeting a 10-12% increase in deposits during the current fiscal, he said, adding the cheaper overseas borrowings and refinance options will be given a greater thrust than classic deposit garnering.
Malla said the bank is expecting an improvement on the assets quality front because of the diligent measures in loan approvals and disbursements it has been taking.
IDBI Bank expects to close FY 12 with a net NPA (non performing assets) ratio of under 1% as against 1.06% for FY 11, Bansal said.
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First Published: Mon, May 23 2011. 07 16 PM IST
More Topics: IDBI Bank | R M Malla. | ATL | Bonds | R K Bansal |