Industrial Development Bank of India (IDBI) will hit the market next month with a Rs 500-crore Flexibonds issue carrying a 100 per cent greenshoe option.
"We are in the process of finalising the instruments. The coupon rate will be fixed at around 40-50 basis point above the yields of government papers of comparative maturity," sources said.
The financial institution has already garnered an oversubscription of more than Rs 240 crore for its Rs 500-crore Omni Bonds issue. The closing date for the privately placed Omni Bonds has been extended till September 29.
IDBI sources said: "We have received a subscription of around Rs 741 crore from more than 350 investors. We expect a subscription of another Rs 100 crore by September 29 when the issue closes."
This was the first bond issue placed on the Internet by the institution in riskxpress.com and debtonnet.com. The response through these portals have been quite good and we have raised around Rs 240 crore from these portals, the IDBI officials said.
Meanwhile, IDBI has redeemed about Rs 1,500 crore-worth of its deep discount bonds (total corpus of Rs 2,200 crore).
The FI had launched a special deposit scheme -- IDBI Suvidha -- to mop up at least around 50 per cent of the Rs 2,200 crore-worth of outflow from the redemption of the deep discount bonds. "The Suvidha scheme has till date mopped up around Rs 100 crore. There is a time lag between investors redeeming their deep discount bonds and opting for the roll-over scheme. We are confident of mopping up at least 30 per cent of the bond proceeds through the special deposit scheme," officials said.
By redeeming the deep discount bonds, IDBI will be saving around Rs 100 crore of interest outgo per annum.
