New Delhi: In order to fund its business growth, state-owned IDBI Bank Wednesday said it plans to raise Rs 20,000 crore through bond issuance in more than one tranches from domestic market next fiscal.
The fund raising plan is considered to be one of the highest announced by any public sector banks. SBI has recently taken shareholder approval for raising Rs 15,000 crore from public issue, global issuance or domestic private placement.
The board has approved "the proposal for Rupee bond issuance limit of Rs 20,000 crore to be borrowed in one or more tranches comprising of senior or infrastructure bonds, Basel III compliant Tier II or additional Tier 1 Bonds by way of private placement or public issue during 2015-16...," IDBI Bank said in a filing in the BSE.
It would be "subject to Government of India's approval and compliance with all applicable laws, regulations and guidelines as well as the approval of shareholders...," it said.
Talking about decision, IDBI Bank Deputy Managing Director B K Batra said it is an enabling provision and fund would be raised in tranches depending on requirement of the bank.
Positive thing about bond issuance is that it is a long-term borrowing to address asset liability mismatch of the bank, he said.
Besides, there is replacement of earlier borrowings and deposit mobilisation, he added.
Shares of IDBI Bank closed at Rs 78.05 per unit, down 4.76 per cent on the BSE.
Besides, the board has also approved in-principle the proposal for increase in the number of whole time directors (Deputy Managing Directors) from 2 to 3.
It is subject to Government of India's approval and all other statutory or regulatory approvals to be taken in this regard, it said.
The board of the IDBI Bank has also approved the proposal for separating the post of Chairman and Managing Director into 2 posts of a Chairman and a Managing Director and CEO by effecting amendments in the Articles of Association.
The board has also appointed N S Venkatesh, executive director as CFO of the bank in place of P Sitaram.
