MUMBAI, Jan 5: Industrial Development Bank of India (IDBI), which has announced the launch of Rs 1,500 crore Flexibond issue, has posted a smart rise in loan sanctions and disbursements during the nine months ended December 1997.``During the first nine months of 1997-98, overall sanctions of IDBI aggregated Rs 17,223 crore, increasing by 70 per cent over the corresponding period of the previous year," IDBI chairman S H Khan said.Actual loan disbursals during April-December 1997 amounted to Rs 9,895 crore, reflecting an increase of 31 per cent over the year-ago period. A major chunk of the sanctions (33 per cent) was accounted by infrastructure - 20 per cent to power, 9 per cent to telecom and 4 per cent to ports.``IDBI's operations in a way reflect the state of industrial investment climate in the country. The slowdown in the rate of growth of industrial production, which began more than a year ago, is still continuing,'' Khan said, adding, ``the slowdown was much more pronounced in the first quarter but thereafter there have been definite signs of recovery, albeit at a slow rate. In particular, manufacturing sector has recorded an acceleration in growth during April-October 1997 to 4.7 per cent against 4.1 per cent in the first half of current fiscal.''IDBI is planning to raise Rs 750 crore of unsecured Flexibonds with an option to retain another Rs 750 crore. The issue will be open for subscription on January 23, 1998. There are three types of bonds with a minimum investment amounts ranging from Rs 5000 to Rs 12,750. Both Crisil and CARE have rated the bonds as ``AAA". Each of the four instrument - IDBI Infrastructure Bond-98, IDBI Growing Interest Bond-98, IDBI Deep Discount Bond-98 and IDBI Regular Income Bond-98 - offers options to meet the needs of various investors. ``Flexibonds are issued as unsecured bonds because all financial institutions and bank borrow mainly through unsecured instruments,'' Khan said.The bonds have been declared as public securities by the Government of India and the state governments of Rajasthan, AP and MP and it has applied to the governments of Maharashtra and Gujarat for such facility. It has appointed Securities Trading Corporation for market making of bonds above Rs 10 lakh and IDBI Capital Market Services for bonds below Rs 10 lakh.According to the company, Rs 11,186 crore (29.5 per cent) worth of bonds and borrowings through private placement are unsecured. Therefore, IDBI is not setting up any debenture redemption reserve. ``The depreciation of Indian rupee will not affect the liabilities of IDBI because the risk is passed on to the borrowers. For all the outstanding multilateral and bilateral credits were mainly routed through the government of India."
