IDBI Bank on Friday said it would come out with a follow-on public offer (FPO) in January next to meet its future capital requirements. It also announced plans to raise $500 million through bonds from overseas to fund some of the Indian corporates’ overseas expansion programmes.
IDBI Bank Chairman and Managing Director Yogesh Agarwal told reporters here that the bank required about Rs. 15,000-16,000 crore in the next three to four years, he said.
Asked about the amount it plans to raise, Mr. Agarwal said: “the whole size of the issue would be double of what the Central Government is willing to subscribe. “If I come out with issue of Rs. 2, the Union Government will have to subscribe one and the public has to subscribe the remaining one.” The Government holds 52 per cent stake in the bank.
Mr. Agarwal said the bank was waiting to know from the Government how much money it would be getting. The Government had announced to recapitalise some of the public sector banks, including IDBI. It had recently got a $2 billion (Rs. 10,000 crore) loan from the IMF to do so. The capital adequacy ratio of the bank was about 11.7 per cent, Mr. Agarwal added.
He said the bank was planning to raise $500 million by the end of December. The amount would be raised through bonds from overseas markets under its $1.5 billion mid-term notes programme to meet the funding requirements of Indian corporates for overseas expansions.
Asked about IDBI Home Finance sale, he said the sale was not going through because the Government had not given permission. “For the present it is not on our radar. We are considering merger of the entity with the bank as one of the options,” he added.
About home loan growth, he said the bank was expecting to give Rs. 8,000 crore under this segment in the current financial year.
The outstanding housing loans stood at Rs. 12,500 crore at the end of March, 2009.
The bank posted a 57 per cent rise in its net profit for the quarter ended September, 2009, helped by growth in both net interest and fee-based income. The net profit of the bank for the July-September quarter was at Rs. 254 crore, up from Rs. 162 crore a year ago.
The bank’s net interest income rose to Rs. 472 crore, up from Rs. 129 crore a year ago, while fee-based income rose 99 per cent to Rs. 390 crore.