ICICI Bank, the country’s second largest private bank, is preparing to issue US dollar bonds on a large scale for the first time since 2017. According to sources, the bank is planning to raise at least Rs 500 crore ($500 million) from the foreign market.
It is being told that the bank will raise this fund under the Global Medium-Term Note (GMTN) program in the coming few weeks. This is a special platform for issuing debt in the foreign market.
Will benefit from new facility of RBI
Sources say that ICICI Bank is taking this step after the recent relief from the Reserve Bank of India (RBI). RBI has started the concessional foreign exchange swap facility for eligible institutions taking foreign loans. Its purpose is to encourage Indian banks to raise cheap funds from abroad.
First big dollar bond deal since 2017
If the deal is completed, it would be ICICI Bank’s first major US dollar bond sale since 2017. At that time the bank had also raised 50 crore dollars. According to sources, ICICI Bank is in talks with many global investment banks to complete this deal. However, the bank did not respond to Bloomberg’s email seeking comment on the matter.
Many Indian banks are also raising foreign funds
After the new arrangement of RBI, many Indian banks are preparing to raise money from the foreign market. Recently HDFC Bank had raised funds by issuing bonds worth $750 million ($750 million). Apart from this, Axis Bank, State Bank of India (SBI) and Power Finance Corporation (PFC) have also raised capital from the international market.
Rupee also got support
This step of RBI has also strengthened the rupee. Due to the rise in energy prices during the US-Iran war, the rupee had become very weak against the dollar. At the end of May, the rupee had reached a record low of around Rs 97 per dollar. Since then till now it has seen a strength of about 2%.
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