New Delhi: India’s largest private lender ICICI, which raised $5 billion last month in India's biggest share sale, is borrowing a record $1.5 billion to fund growth in demand for credit, its Chief Financial Officer Vishakha Mulye announced Friday.
ICICI has asked banks to send in proposals for the $1.5 billion loan, showing different scenarios for raising the funds in maturities ranging from one year to 10 years, Mulye was quoted by Bloomberg. ”We have to decide on the exact amount, timing, tenor of the loan and the banks. We will probably take a decision in the next week.”
The loan will be 50 percent more than ICICI's previous record for an Indian bank, which was denominated in yen. ICICI borrowed from a group of 26 banks including Bank of Tokyo- Mitsubishi UFJ Ltd., HSBC Holdings Plc and Standard Chartered Plc in December 2006.
ICICI is seeking the biggest loan by an Indian bank to meet credit expansion of as much as 30 percent in India. “Credit is expected to grow at 20 to 30 percent,” Mulye, was quoted by Bloomberg. “We see a robust growth in each of our businesses.”
According to the data compiled by Bloomberg, ICICI has almost tripled its balance sheet to $62 billion in the five years to March 31. The bank has said it will increase assets by as much as 30 percent this year.
Its $5 billion share sale last month was intended to boost lending to Indian companies expanding overseas. This time too ICICI's borrowing “is required to feed the growing demand for loans in the country,” a top ICICI official was quoted by moneycontrol.com.
India's $854 billion economy has expanded 9.4 percent in the fiscal year ended March 31. In fact the International Monetary Fund expects India to overtake South Korea this year as Asia's third-biggest economy behind Japan and China.
With agencies inputs
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