New Delhi, June 23: The Industrial Finance Corporation of India (IFCI) has drawn up plans for a $150-million GDR issue. Details about the pricing and the launch of the issue will be decided at the financial institution's board meeting on June 26. The board is meeting on Thursday to finalise the accounts for 1996-97.

IFCI has been consulting a number of international investment banks for its GDR issue. It has drawn up a shortlist of investment banks that are likely to be assigned the mandate. Further details are expected to be announced by chairman and managing director KD Agrawal later this week, sources said.

Talks with investment banks have been a quiet affair lest hordes of foreign merchant banks should descend on IFCI.

IFCI seeks to raise capital ranging between Rs 400 crore and 500 crore from the international market in the current year. During the course of ``weighing the pros and cons of a GDR issue,'' it is likely that the foreign issue may get converted to a quasi-debt issue whereby IFCI will issue convertibles. The possibility of sourcing the international market for subordinated debt is also not ruled out, sources said. Subordinated debt is unsecured long-term debt.

IFCI is also finalising an issue of preference shares amounting to Rs 100 crore. The issue will help IFCI raise its capital adequacy ratio beyond 10 per cent.

As its asset portfolio grows, the financial institution will be under pressure to shore up its capital adequacy ratio. ``A figure of 10 per cent does provide a high level of comfort, but it can be restrictive in the long run,'' a senior IFCI official said. The institution has drawn up plans to lend Rs 2,000 crore in the current year through short-term loans alone.

IFCI's results, which are expected on June 26, will be ``better than last year,'' senior officials said. Discounting fears of an industrial slowdown, IFCI officials said its non-performing assets have decreased in percentage terms in 1996-97.

``Recessive tendencies are apparent only in some sectors, and are not apparent in industries across the board,'' a senior officialsaid.

In 1995-96, the institution sanctioned loans amounting to Rs 10,300 crore and disbursements amounted to Rs 4,563 crore. Most of the sanctions given during 1995-96 have fructified during 1996-97, as a result of which the disbursements are expected to be much higher than the previous year.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.