The Hindu Business Line : Higher interest on Flexibond-12

The institution is offering interest rates ranging from 9.25 per cent to 9.75 per cent under different options on its popular Tax Savings Bond. This bond accounts for 90 per cent of the FI's Flexibond subscription. It has, however, discontinued the Money Multiplier Bond and introduced a new one called Retirement Bond.

The FI has also discontinued the call option in its 10-year Regular Income Bond and introduced put option in the Growing Interest Bond from the end of two years.

IDBI has the right to retain oversubscription up to 100 per cent of the Rs 250-crore issue that opens for subscription on February 4. The issue would close on February 25. IDBI collected about Rs 310 crore through its last issue in January.

Announcing the issue, Mr P.P. Vora, Chairman and Managing Director, IDBI, told newspersons that the proceeds from the bond issue would be deployed in instruments rated AA and above. There would be no mismatch between the maturity profile of the bonds and the instruments into which the resources would be channelled.

Mr Vora said the coupon rate was benchmarked to the 10-year Government securities. He said normally IDBI offered a rate about 200 basis points above the 10-year Government security as they were unsecured. To a question why the rates were high in spite of G-Sec yields falling, he said the coupon was decided when the offer document was filed with SEBI and at that time, the 10-year G-Sec was yielding more.

Mr Vora, however, could not say whether the coupon would be reduced for the next issue of Flexibonds, expected in March, if the G-Sec yields remained low.

Send this article to Friends by E-Mail

Stories in this Section
Rupee closes steady; gilts range-bound

SBT cuts rate on housing loans

The wheel turns full circle

KVB net up 53 pc

ABN Amro support centre in Chennai

BoB asset company may divest stake to foreign partner

HSBC AMC to launch MFs soon

Higher interest on Flexibond-12