IDBI Bank withdraws plans to raise Rs 1,000 cr via bonds

Private sector IDBI Bank on Friday said it has withdrawn its plans to raise Rs 1,000 crore capital through Basel-III compliant bonds. In a filing to the exchanges, the bank informed about its decision to withdraw the issue, citing reasons including sudden RBI policy rate cut, CRR cut, liquidity support and other measures announced, causing significant fall in interest rates in the market.

"This has reference to bank's earlier disclosure made on March 24, 2020, wherein it was intimated that bids for the issue of Basel-III compliant tier 2 bonds for aggregate total issue size of Rs 1000 crore, with a base size of Rs 500 crore and a greenshoe option to retain oversubscription up to Rs 500 crore. "In continuation of the above disclosure, we hereby inform that pursuant to the sudden RBI policy rate cut, CRR cut, liquidity support and other measures announced today causing significant fall in interest rates in the market, the bank has withdrawn the above said issue," the lender said.

The aforesaid disclosure is being made in compliance with Regulations 30 & 51 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, it added. Notably, in a major boost to the financial sector as the coronavirus pandemic has crippled the Indian economy badly, the Reserve Bank announced a 100 basis points cut in the cash reserve ratio (CRR) requirement for the banks that will hence leave them with more cash available for lending. In all, the RBI has announced a huge Rs 3.74 lakh crore liquidity support to the financial system through a host of monetary mechanisms. It is an unprecedented move, as the governor, Shaktikanta Das said that these are extraordinary circumstances that require unconventional measures to support the economy battered by a lockdown that has stopped nonessential economic activities.

IDBI Bank stock closed 2.60 per cent up at Rs 19.70 apiece on the BSE.

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