For ICICI, the strategy to maintain the coupon rates this time around is sure to pay off as investors are expected to rush to avail of the higher rates. This is more so because this is the last opportunity investors have to reap the benefits of high rates as all subsequent issues are likely to be pegged lower by at least 50-75 basis points. ICICI, which has witnessed a steadily dwindling collection since the July issue of Safety Bonds (see table II), could seea turnaround this time.

The best thing about the latest ICICI Safety Bond issue is that the coupon rate on the Tax-Saving Bond has been left untouched. Better still, options available to investors under this instrument have been widened. With the financial year drawing to a close, investors who are looking forward to this instrument now have a wide choice. Making a debut this time, is a five-year bond with Section 88 benefit where the coupon is higher at 13 per cent. At the same time, ICICI has retained the three-year bond option (12.5 per cent coupon) as well as the zero-coupon option under its Tax-Saving Bond.

For catering to investors who have booked capital gains thanks to the bullish market sentiments in the post-Budget scenario, ICICI has expanded the scope of its Section 54 EA offering. Featured for the first time, is a bond with Section 54 EA offering a monthly interest payment of 11.75 per cent. The yield on this bond is attractive and varies from 14.2 per cent to 20.5 per cent depending on theamount invested. The annual interest payment option at 12.50 per cent has also been retained.

On the Regular Income Bond, the coupon on the monthly option has been cut by 25 basis points. According to ICICI officials, servicing this option is the most expensive as it involves the maximum paper-work. ``It was, therefore, though necessary to cut the rate marginally to bring down costs,'' the official said, adding that the coupon on all the other option have been maintained. The Encash Bond, too, has the same rates of 11 per cent in the first year and 18 per cent in the fifth year. Even the yield in the Money Multiplier Bond, where money doubles in 5 years and four months, is the same.

The only hitch is that ICICI will be competing for funds with IDBI Flexibond 6, which is currently open. With IDBI also offering very attractive rates (the issue hit the market before the RBI announcements), ICICI will have to aggressively market its bonds to ensure a good oversubscription. The other problem with the ICICISafety Bond issue is that there is no new instrument unlike Flexibond 6, where investors have been offered a rather innovative Retirement Bond. With its usual flair of bonds, it's now ICICI versus IDBI. The bond issue will open for subscription on March 10.