IDBI cuts Flexibond rates

Industrial Development Bank of India (IDBI) has slashed the deposit rates on its Flexibond-17 offering, to be kicked off next Monday (Januar...

Industrial Development Bank of India (IDBI) has slashed the deposit rates on its Flexibond-17 offering, to be kicked off next Monday (January 20), by 75 to 100 basis points, when compared to its previous issue—Flexibonds-16.

The size of the issue of the FI in the new series of Flexibonds, third in the series during the year, is Rs 300 crore, with a greenshoe option for the same amount. The issue will remain open till February 11, 2003, IDBI said in a release on Tuesday.

On Infrastructure (Tax-Saving) Bond, the FI is offering 7.25 per cent and 7.5 per cent annual payment for the bonds with maturity of three and five years respectively against 8 and 8.25 per cent respectively under Flexibonds-16. Under the cumulative option also terminal value of the bonds of face value of Rs 5,000 each has been brought down to Rs 6,390 and Rs 7,450 for maturities of 42 months and 66 months, respectively.

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Under Regular Income Bond, which has only four options now instead of six earlier, the rates were slashed from 95 bps to 100 bps. For seeking quarterly payments, the investors have to take six bonds (Rs 30,000 face value) now against five bonds (Rs 25,000 face value) in the earlier issue.

For annual payment of interest the bonds of seven and 10 year maturities will fetch the investor 7.75 per cent and 8 per cent, respectively, against 8.75 per cent and 9 per cent per annum. On bonds under quarterly interest payments system the rates on offer are 7.4 and 7.7 per cent respectively as against 8.4 and 8.65 per cent respectively.

The two new schemes namely —Money Multiplier bond and Growing Interest Bond—have replaced Floating Rate Bond and Retirement Bond of the previous issue. However, there is no put/call option on any of the instruments except in the case of IDBI growing interest bond.