IDBI Flexibonds Issue Seen Sailing Through

Mumbai, December 24: | Updated: Dec 25 2002, 05:30am hrs
The Industrial Develop-ment Bank of Indias (IDBI) Flexibonds-16 issue which concluded on December 23, 2002 has garnered total issue amount, including the greenshoe option, of Rs 500 crore according to preliminary reports.

The maiden issue of 2003-B series, with reduced yields, has garnered a very good response, with subscriptions crossing the issue size and greenshoe option put together. This is basically due to the high response to our tax-saving infrastructure bonds,, IDBI sources told FE on Tuesday.

When asked about the basis of allotment in case of subscriptions crossing the outer limit of Rs 500 crore set for acceptance by the FI, sources said: We have to wait for another three or four days before we arrive at the final figure. Subscriptions to infrastructure bonds would get priority in allotments over others as was mentioned in the offer document. The timing and pricing of the issues have helped the issue garner high response. The timing was such that no other issue was available for subscription and the issue size of Rs 250 crore was reasonably balanced, IDBI sources said.

Despite reduction in rates in line with market trends, rates offered on Flexibond-16 are still attractive. The other major attraction was that there were no put and call options, which guarantees yields in a falling interest rate scenario, an analyst said.

IDBI had slashed interest rates offered on its Flexibonds-16 issue by 25 to 75 basis points when compared to the previous issue, Flexibonds-15. IDBI though had offered investors an opportunity to invest in these bonds for longer tenures.

The issue offered four instruments, including Floating Rate Bonds, Retirement Bond and Regular Income Bond.

The previous issue Flexibonds-15 garnered Rs 437 crore, which is Rs 137 crore over and above the issue size of Rs 300 crore.