ICICI set to launch next issue

According to merchant banking sources, Safety Bonds October 8217;99 will have a regular fare of bonds. On offer would be instruments with regular returns, deep discounts, tax savings or step-up interest.

In fiscal 1999-2000, ICICI has already tapped the domestic market thrice 8211; twice with a debt issue and once with an equity issue, which was a pre-cursor to the ADS offering. The interest rates on the instruments are likely to be maintained at the same level as that of the July issue. Thismeans ICICI would be offering an yield of 12.1 per cent for a 3-year monthly income plan as against UTI MIP8217;s 10.5 per cent tax-free.

The May issue of the Safety Bonds mopped up Rs 328.52 crore, while the July issue is reported to have mobilised around Rs 310-320 crore. According to a senior official of ICICI, the Safety Bond collections cannot be compared to that of IDBI8217;s Flexibond 7 or other financial institutions. 8220;We are more focussed on retail investors and, as a policy, discourage large applications. In fact, any amount of over Rs 1-2 crore is necessarily routed through our treasury window. This helps us maintain lower holding costs which, in turn, ensures low cost of funds. Besides, we come out with 3-5 issues every year compared with only 1-2 from IDBI, so it is important to look at the combined yearly collections of both for a comparison.8221;