Industrial Development Bank of India plans to raise Rs 2,500 crore (Rs 25 billion) through a flexibond issue with a greenshoe option of the same amount even as it expects to reduce interest costs by around Rs 800-900 crore (Rs 8-9 billion) in the current fiscal.
"We plan to raise Rs 2,500 crore shortly and are in the process of filing the umbrella prospectus with Securities and Exchange Board of India for the bond issue," IDBI executive director O V Bundellu told newspersons on Saturday.
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In the current fiscal, the annual fund requirement was Rs 23,000 crore (Rs 230 billion) of which Rs 9,720 crore (Rs 97.20 billion) would be raised through borrowings and balance would be met from internal generation, he added.
IDBI general manager R K Bansal said out of Rs 9,720 crore (Rs 97.2 billion), Rs 1,270 crore (Rs 12.7 billion) would be raised through foreign currency loans while the balance would be via rupee loans.
The financial institution has already made gross borrowings of Rs 5,000 crore (Rs 50 billion) and the average cost is around 6.5 per cent, he said.
Bundellu said IDBI would be finalising the details about its foreign currency loan in the next 10-15 days.