ICICI Bank to raise Rs 25k cr through NCDs in FY17

Industry:    2016-06-07

ICICI Bank, the country’s largest private sector lender, is planning to raise Rs 25,000 crore by private placement of bonds, debentures and securities, including bonds and non-convertible debentures (NCDs), it said in a notice to the shareholders regarding the annual general meeting which is scheduled to be held on July 11.

The bank has halved its fund-raising plan in FY17, compared to the Rs 50,000 crore it was looking to raise last year. However, despite the approval for Rs 50,000 crore, the lender had raised only Rs 6,500 crore till May 13, and in view of this, it had reduced the fund-raising amount.

“Considering the same, the bank has assessed its fund requirements and it is proposed that the borrowing limits for the purpose of Section 42 read with 10 Notice the rules relating to this Section for borrowing by way of non-convertible securities including but not limited to bonds and NCDs be reduced for the current year and fixed at Rs 25,000 crore,” the lender said.

The notice added it would issue securities including bonds and NCDs through a private placement at coupon rate of up to 300 basis points above the prevailing yields for risk-free instruments on rupee government bonds of similar maturity.

Earlier, the lender had said they would be looking at raising infrastructure bonds but had not specified the amount it was looking to raise. Lenders’ interest in raising money via long-term bonds had picked up after the Reserve Bank of India  made changes in the regulation, announcing that such bonds (tenor of more than seven years) would be exempted from cash and statutory reserve requirements, if the proceeds were used to fund new long-term infrastructure projects and affordable housing.

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