IDBI Bank to meet investors for Swiss bond issue in May

India's IDBI Bank, which is looking to raise 150 to 200 million Swiss francs (USD 167-223 million) in a bond issue, will hold investor meetings in Zurich, Geneva and Lugano in the first week of May to gauge demand, a senior official told Reuters on Tuesday.

Separately, the bank said it is raising USD 225 million from other sources, for which the Asian Development Bank will act as a partial guarantor, helping to lower its borrowing costs by 30-50 basis points.

"At this point, there is a definite advantage to go for Swiss bond issue. We are diversifying our funding sources," Executive Director Melwyn Rego said.

"We will be visiting Zurich, Geneva and Lugano and then we will take a call on whether to launch the bond," he said.

The bond sale would be launched in the second week of May, depending on investor response, Rego said.

"It is cheaper than the dollar market. Otherwise, there is no point in going for it," he added.

Both fund-raisings are part of the company's plan to raise USD 1 billion through medium-term notes in the fiscal year that ends in March 2012.

IDBI expects loan growth of 15 to 18% in the current fiscal year, Chairman and Managing Director R.M. Malla told reporters.

Indian banks, by and large, expect credit growth of 22-25% in the current fiscal year -- almost the same level as last year -- but have said deposit growth could also see a boost.

Earlier on Tuesday, IDBI reported standalone net profit of Rs 516 crore (USD 116 million) for the Jan-March quarter, beating a Reuters poll forecast for a profit of Rs 411 crore.

Shares of IDBI, which the market values at USD 3.23 billion, closed up 2.89% at Rs 149.55 in a choppy Mumbai market.