ICICI Ltd proposes to raise Rs 15,000 crore in the current financial year through the on-tap issue of bonds in the private placement market. The proposed issue has been rated AAA by Investment Information and Credit rating Agency (Icra).
As part of its resource raising plans for the year, ICICI had also filed an umbrella prospectus with the Securities Exchange Board of India (Sebi) to raise Rs 4,000 crore through retail bond issues during 1999-2000, of which the first tranche was raised in May. On the equity side, ICICI is planning to strengthen its tier-I capital through global depository receipts (GDRs) and domestic private placement with other institutions for Rs 2,000 crore.
According to Icra, ICICI's yields would remain under pressure due to increasing competition, but steps taken by it to reduce its cost of funds and introduce greater efficiency in its treasury operations would help offset the impact of lower yields. The rating agency has cautioned against a rise in the institution's NPAs. "Icra notes with some concern at the increase in net NPAs from Rs 2,811 crore as of March 31, 1998 to Rs 3,623 crore as on March 31, 1999," said an Icra release.
ICICI has a significant exposure in commodity sectors, which in turn depends on trends in the global markets. "The sustenance of a recovery in commodity prices and the effectiveness of ICICI's efforts to contain portfolio contamination would have a critical bearing on the performance of ICICI," it added.
ICICI's capital adequacy ratio declined from 13 per cent as on March 31, 1998 to 12.5 per cent on March 31, 1
