IOC is raising the money through the book-building process and the price band has been kept at 11.25-11.75 per cent. I-Sec and JM Financials are the advisors to the issue and joint book-runners and the list of arrangers include DSP, Kotak, Enam Securities, RR Financials and SBI Caps.

The issue, which has a core size of Rs 300 crore with a greenshoe option of Rs 200 crore, has been lapped up by banks and mutual funds. Unit Trust of India has made bids for Rs 250 crore, sources said.

Banks and MFs have been finding the 11.25-11.75 band attractive as the yield of 364-day treasury bills is now pegged at 10 per cent and the 15-month government security (11.42 per cent 2000 paper) is being tradedat the secondary market at a semi-annual yield of 10.65 per cent. One-year ICICI paper was traded on Monday at 11.55-60 per cent.

"Traditionally, the market has huge appetite for the IOC paper. This time around, the yield is quite attractive," sources said.

According to merchant banking sources, over Rs 300 crore worth of bids have been made at a cut-off point of 11.35 per cent and over Rs 500 crore worth of bids have been made in the range of 11.45-50 per cent.

"The paper is likely to mop up over Rs 1,200 crore by the time the issue closes. If IOC wants to retain only the core size of the issue (Rs 300 crore), it can settle for a coupon around 11.35 per cent. If the public sector oil major is willing to pay more -- around 11.50 per cent-- it will be able to mop up the entire issue size (Rs 500 crore)," sources said.