To recapitulate, ICICI has so far completed four tranches of safety bonds from the umbrella clearance accorded by Sebi in March 1998. The four public offers plans to collect a cumulative Rs 2,600 crore -- half of this amount to come from oversubscription. Of this target, ICICI could mobilise -- inclusive of an oversubscription Rs 470.63 crore -- only Rs 1,770.63 crore. The fifth tranche of ICICI safety bonds for a targeted amount of Rs 600 crore, including the greenshoe, or oversubscription, option of Rs 300 crore, is currently open to the public.

In terms of public response, the first four tranches of ICICI safety bonds have attracted patronage from cumulative 521,052 applicants. While the first two offers could attract 69,073 and 141,184 investors respectively, the introduction of tax saving bonds in the third tranche probably attracted a higher number of investors, resulting in a final valid count of 181,802.

However, the larger fourth tranche, which immediately followed the massive Rs 1,500-crore IDBI flexibonds offer, had to remain content with only 128,993 valid applications.

The average size per application for the ICICI bonds this fiscal varies between a high of Rs 61,101 in the first tranche and a low of Rs 22,942 in the third tranche. The four tranches of the umbrella issue collectively give an average size per application of Rs 33,982.

As regards allotment, for all the four bond issues, ICICI has completed the formalities in less than 30 days, with the second tranche setting a faster pace by allotting the bonds within just 14 days. On all the four occasions, the listing by ICICI has also been prompt, in a range of between 22 days and 34 days from the date of closure of the issue.

In comparison to ICICI's four visits so far, IDBI has accessed the retail bond market only once in the current fiscal. In September this year, IDBI made a large Rs 1500-crore (Rs 750 crore plus another Rs 750 crore greenshoe option) flexibonds issue. In spite of not offering any tax saving bonds, IDBI could attract an impressive subscription of Rs 1,342.71 crore from 132,250 investors. In effect, IDBI has managed to garner, in one go, more than 75 per cent of what ICICI did raise in four attempts. More importantly, IDBI has obviously saved on substantial administrative overheads associated with frequent bond offers that ICICI has suffered. But, the average size of an application for IDBI bond issue was Rs 101,528, which is about three times the average size of an application in the four tranches of ICICI safety bonds. Undoubtedly, bulk applicants have more patronised IDBI than ICICI.

All the same, IDBI has not reciprocated the grand gesture of the investors. For, though its only retail issue in this fiscal closed on October 17, and its allotment got finalised on November 12, the bonds have not yet been listed on the bourses. Indeed, as stated already, just this week IDBI has deemed it necessary to file the listing applications. Perhaps, even this delayed action on the part of IDBI might not have come about but for the launching of the second tranche during the week.

Different approaches to listing apart, ICICI and IDBI have not helped to ameliorate the plight of the hapless investor in the bond market, devoid of liquidity. If the official quotation list of BSE for November 6, 1998, is anything to go by, not a single trade has taken place in any of the ICICI bonds issued during 1998. As for IDBI, it has done only marginally better with a token trade in its infrastructure bonds offered early this year.

This does not imply that the investors are inclined to hold on these bonds till their maturity. Both the issuers and the investors need greater liquidity. And with the profile of institutional lending undergoing a marked metamorphosis towards a judicial mix of short-, medium- and long-term credit from the earlier exclusive domain of long-term lending, the institutions especially have to attract investors over the entire maturity horizon.

Achieving such an improved and constant flow of funds, however, calls for certain basic changes in attitude on the part of the institutions. First, they will have to shed their traditional propensity to find shelter under legal fine print. Second, they will have to learn to understand and be more responsive to investor requirements. To begin with, the institutions should voluntarily offer compulsory market-making in these bonds, without "reserving the right to review/modify/discontinue the same at anytime and in any manner" -- as ICICI often threatens, or without making its implementation unilateral -- as IDBI likes it to be. Further, they should consider publishing on a monthly basis the purchase/sale prices of their various bond variants valid for the whole month. Only then will the investor feel assured of liquidity and consider these bonds for investment. If the debt market is to grow exponentially, the `fastest growing' and the `largest' Indian financial institutions must learn to constantly improve thequality of their responses.

(Arranged by Investar -- The Aarthik News & Research Syndicate)