Public sector lender IDBI Bank today said it plans to raise USD 580 million from the overseas market this fiscal as part of its USD 1.5-billion overseas bond sale programme.
The bank raised USD 200 million (250 million Singapore dollars) for a three-year maturity with a coupon of 3.65
percent from the Singapore market on August 21, making it the first domestic bank to raise funds in Singapore dollars.
The issue got a sound response with demand for the issue touching 3 billion Singapore dollars or 12 times the issue
size, the bank said.
With this round of fund raising from the Singapore market, the total fund raising through medium-term-note
programme(MTN) had reached USD 920 million out of the total USD 1.5 billion. We are likely to raise the rest of the amount (USD 580) in the current financial year,” executive director Melwyn Rego told reporters here.
HSBC, DBS, StanChart were the lead mangers to the issue.
Talking about initiatives taken up by the bank to raise the rest of the amount, Rego said the bank was in advanced
stage of discussions with a multilateral funding institution and also planning to enter into a new market to raise oney which has not been tapped by any domestic bank yet.
The public sector lender is also mulling to increase the size of MTN programme to USD 2.5-3 billion from the present USD 1.5 billion from next January.
Normally, we renew our MTN programme in January. So, we are planning to increase it to USD 2.5-3 billion next
January,” Rego said.
Elaborating the significance of recent fund raising from the Singapore market, Rego said it was first of its kind among the domestic banks and the coupon was very attractive.
Talking about utilisation of proceeds from the bond sale, deputy managing director BK Batra said the fund raised
would be deployed in normal business operations.
The proceeds will be utilised for normal business operations. We are also witnessing sound demand from clients
for the overseas funds,” Batra said.
IDBI Bank’s MTN issue in Singapore comes on the heels of the SBI, ICICI Bank, Axis Bank, IOB and UBI raising USD3.
10 billion over the past one month while Exim Bank had raised another USD500 million early this month.
Others like Bank of Baroda and Bank of India and companies like Rural Electrification Corporation, Jindal
Steel & Power and Power Finance Corp are also waiting to mop up funds from international markets.
The biggest fund raiser so far this year has been Reliance Ind, which had mopped over nearly USD 5 billion since
February this year.
———————————PTI