No plan to hike IDBI's flexibond issue coupon
OUR BANKING BUREAU
MUMBAI, Jan 17: The Industrial Development Bank of India (IDBI) on Saturday said that the coupon on its forthcoming Rs 1,500-crore flexibond issue will not be hiked despite the two percentage points increase in the bank rate. An IDBI release, issued today, said that the institution will launch the third series of flexibond on the scheduled date -- January 23."On the basis of the advice received from the lead managers, IDBI believes that the yield to the investors offered by it would still be in line with the market expectation notwithstanding the recent hike in bank rate," the IBDI release said. The issue will close on February 18. IBDI chairman SH Khan was not available for comment. Other senior executives of the institution were busy attending roadshows in Benaras and Aurangabad. According to sources, the IDBI top management will meet in Mumbai on Monday to take a final view on the possibility of raising the coupon rates of the debt instruments. ``We need just 48 hours to replace the already availableapplication forms with new interest rate printed on it,'' sources said. The IDBI release, however, clearly stated that the coupon rate will not be hiked. "A vigorous marketing campaign has been mounted by IDBI and meetings held at over 70 important commercial centres.... These events covered across the country show the expected positive response from the investing community," the release said. Another mega debt issue -- the seven-year Rs 500-crore Bank of India subordinated debt -- which was expected to hit the market in the third quarter of the current fiscal is likely to be postponed, BoI sources said. ``We are not in hurry and will prefer to wait till the market calms down, which is unlikely during this fiscal,'' sources said. ``When we can wait to borrow at a low rate in future, we do not want to rush to the market with a higher rate,'' they added. Both the finance ministry and the RBI had already cleared the issue. The bank will take the book-building route and has set a band of 12-12.5 per cent for
its long-term paper. The seven-year paper will be privately placed among wholesale investors.BoI had held a meeting of its merchant bankers to finalise the details of the issue. The lead managers to the issue are SBI Capital Markets, while ICICI Securities, Kotak Mahinadra, DSP Merrill Lynch and BoI Financial are the other managers to the issue.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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