IDBI Bank gets board's nod to raise Rs 20,000 crore from bonds in FY17

State run lender IDBI Bank in a stock exchange filing on Tuesday informed about the approval received from its Board of Directors for the issuance of rupee bond for up to Rs 20,000 crore by the end of FY17.

The bank, during its board meeting held on Tuesday, approved in-principle the rupee bond issuance limit of Rs 20,000 crore, IDBI Bank said in a regulatory filing to stock exchanges. The fund would be raised in one or more tranches comprising senior or infrastructure bonds, Basel-III compliant tier-II or additional Tier-I bonds by way of private placement or public issue in 2016-17.

Bank has seen a flurry of activities in last one year and half on various fronts. Only last month, the bank got market regulator's approval to raise Rs 3,771 crore through issue of shares to qualified institutional players, a move which would dilute the government's holding significantly in the government owned lender.

Currently government's holding in the bank stands at 80.16 per cent. As per the existing norms, the government equity in a PSB cannot go below 52 per cent to maintain the public sector character of state-owned banks. Earlier in the Union Budget, Finance Minister Arun Jaitley had indicated a change in the characteristics of IDBI Bank where government plans down its current stake down substantially.

IFC, a World Bank arm and the largest global development institution has also shown interest in buying stake in IDBI Bank via QIP. The government is trying to get large institutional investors to buy stake in IDBI on the lines of private sector lender Axis Bank.

Shares of IDBI Bank were trading at Rs 68.55, down by 0.50 per cent on NSE.