Buoyed by the good response to SBI's bond sale last week, Indian Overseas Bank today said it will speed up its $500-million overseas bond issue and will launch the same within a month.
"We are likely to come up with the medium-term note (MTN) issue of $500 million in the next one month," Indian Overseas Bank (IOB) Chairman and Managing Director M Narendra told reporters here.
Last week, State Bank of India (SBI) raised $1.2 billion from international markets through five-year dollar- denominated bond sale, at a coupon of 3.75% over US T-bills, or 4.125%, which received sound response from investors.
"After the response to the SBI issue, we are hopeful of receiving good response from foreign investors," Narendra said, adding it is difficult to predict the rates.
IOB has an enabling resolution from its Board to raise $1 billion through overseas bond sales. The Chennai-based lender had already raised $500 million in the last fiscal and successfully deployed the same, after which it is planning to raise the rest amount in the current financial year.
The government bank is also planning to come up with a qualified institutional placement (QIP) issue to raise capital for supporting business growth. "If the market situation improves, we may come up with a QIP issue to raise capital, which will support future business growth," Narendra said.
The bank, which has tier-I capital of 7.92% as of the June quarter, requires about Rs 1,500 crore capital this fiscal that can support 18% credit growth.
"We require around Rs 1,500 crore in FY13 to support a loan growth of around 18%," he said.
IOB posted 13.55% rise in net profit to Rs 233.44 crore in Q1. The bank has reported net interest margin of 2.59% in Q1 with an overall business growth of 23.3% to Rs 3.34 lakh crore.
"We aim to reach a total business of Rs 3.85 lakh crore with a NIM of 2.85% by end of this fiscal," Narendra said.