IDBI Bank surges 10% on fund raise plan, proposal to sell stake in IFLI

Shares of IDBI Bank advanced up to 10.5 per cent to Rs 21.95 on the BSE on Thursday after the private lender said it has targeted to raise up to Rs 7,500 crore through rupee bond in the current fiscal.

At 9:34 am, the stock pared its gains partially to trade 5 per cent higher at Rs 20.8 apiece. In comparison, the headline S&P BSE Sensex index was trading 3 per cent higher at 30,773.60 levels. A total of 0.56 millino shares have changed hands on the counter on NSE and BSE till the time of writing of this report. So far in calendar year 2020, the stock price of the lender has crashed 46 per cent.

At its meeting held on Wednesday, April 8, 2020, the Board of Directors approved the rupee bond borrowing limit of Rs 7,500 crore for FY 2020-21 to be borrowed in one or more tranches, IDBI Bank said in a regulatory filing.

"The borrowing programme comprises additional Tier I bonds up to Rs 3,000 crore, Basel III Tier 2 bonds up to Rs 3,500 crore and senior/ infrastructure bonds up to Rs 1,000 crore by way of private placement during 2020-21," it said.

Separately, the board of directors also approved the proposal to sell bank's stake of up to 27 per cent in its life insurance joint venture IFLI.

Recently, the bank had offered a relief to borrowers to mitigate the burden of debt servicing brought about by disruptions on account of coronavirus pandemic. The bank granted a moratorium on three installments of term loans for three months till May 31, 2020. During the said moratorium period, interest shall continue to accrue on the outstanding portion of the term loan. The Interest accrued will be added to the outstanding loan amount at the end of the moratorium period and the repayment schedule for such loans will be reframed accordingly.