The RBI had on July 21 hiked the benchmark bank rate by one percentage point and banks' cash reserve ratio (CRR) by 50 basis points, triggering a rise in yield of debt papers across all maturities.
ICICI is entering the market with a Rs 250 crore bond issue which will close on September 12. This is the the second tranche of the Safety Bonds series under the umbrella prospectus approved by the Securities & Exchange Board of India. The institution is expected to raise Rs 8000 crore from the public under this scheme.
The last ICICI retail debt issue, floated last month, could mop up only Rs 100 crore. The issue opened after the RBI announcement of the hike in bank rate.
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The late debt issue offers three instruments -- tax saving bonds, regular income bonds and money multiplier (deep discount) bond. The tax savings bonds offers a coupon of 10.5 per cent for three years.
The tax saving bonds offered by ICICI is the first eligible form of investment to give a tax rebate facility to the extent of Rs 80,000 to the customers who invest infrastructural bonds. Investors can also save long term capital gains tax under Section 54EA of the Income Tax Act 1961, if the capital asset has been transferred before March 31, 2000, an ICICI release said.