Sidbi targets Rs 2,500 cr mop up in debt, plans VCF

Small Industries Development Bank of India (Sidbi) plans to raise about Rs 2,500 crore through domestic bonds issues and foreign loans this ...

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Small Industries Development Bank of India (Sidbi) plans to raise about Rs 2,500 crore through domestic bonds issues and foreign loans this fiscal to increase credit flow to the small scale sector.

‘‘We are expecting to raise a total Rs 2,500 crore through these domestic and foreign debts this fiscal,’’ Sidbi chairman P.B. Nimbalkar told PTI here.

‘‘Sidbi has been allowed in the budget to issue capital gains bonds under section 54 EC of Income Tax Act. We are planning to raise Rs 1,000 crore through the bond issue this fiscal,’’ he said.

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The capital gains bond, which would be floated on an ‘on-tap’ basis from June-July onwards, is expected to have a maturity period of minimum 3-5 years, he said, adding that the interest rate on these bonds would depend on market conditions.

Sidbi is also expecting to mop up Rs 900-1,000 crore this fiscal through its priority-sector bond issue, which received overwhelming response mopping up about Rs 1,200 crore last fiscal against a target of Rs 1,000 crore, Nimbalkar said.

He said the bank is negotiating with German development bank KFW for a 30 million deutsche mark (about Rs 65 crore) line of credit for providing loans to companies eager to adopt ‘clean’ technology.

He said the bank had sanctioned loans worth about Rs 10,000 crore and disbursed about Rs 6,500 crore to the ssi sector in 2000-01. ‘‘Last fiscal, we targeted Rs 10,000 crore loan sanction. We are expecting to be near the target,’’ he added.

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Sidbi also plans to fund infrastructure projects for which it has earmarked Rs 400-500 crore this fiscal, Nimbalkar said. Last fiscal, the bank funded 8-10 infrastructure project in the country. Sidbi has also signed MoUs with Rome-based International Fund for Agriculture Development (IFAD) for Rs 107 crore soft loan and another with small enterprises assistance fund for a venture capital fund with a corpus of Rs 100 crore.

‘‘SEAF is negotiating with multilateral agencies like ADB and IFC to float a venture fund in India with a corpus of about Rs 100 crore. Sidbi may contribute Rs 20-25 crore in the fund,’’ the Sidbi chief said.