The board of directors of IDBI Bank on Tuesday gave in-principle approval to issuance of rupee bonds up to a limit of ₹20,000 crore to be borrowed in one or more tranches during FY17 or during one year from the date of passing of the special resolution by shareholders at the ensuing annual general meeting of the bank, whichever is later.

In a notice to the BSE, the bank said the issuance will comprise senior/infrastructure bonds, Basel-III compliant Tier II/Additional Tier I bonds by way of private placement/public issue.

On February 23, the public sector bank said that the market regulator had acceded to its request to raise capital by issue of equity shares aggregating to ₹3,771 crore by way of a qualified institutional placement (QIP).

IFC, a member of the World Bank and the largest global development institution, and CDC, the development financial institution owned by the UK government, among others, are believed to have evinced interest in picking up a stake in IDBI Bank via the QIP.

Medium-term plan The fund-raising drive comes even as the bank has drawn up a three-year medium-term plan, whereby it envisages doubling its business, rebalancing its loan portfolio towards micro, small and medium enterprises, agriculture and retail credit, augment low-cost deposits, and purge the balance sheet of bad loans.

Under the plan, IDBI Bank expects to double its business (deposits plus advances) to ₹10-lakh crore (deposits of ₹5.50-lakh crore and advances of ₹4.50-lakh crore) by FY19 from the estimated ₹5-lakh crore (deposits: ₹2.85-lakh crore and advances: ₹2.35-lakh crore) in FY16.

Related Topics
comment COMMENT NOW