``The rights process should be completed by August and that includes receipt of the proceeds and refunds, if any. A decsion on the retail bond issue will be taken only after that,'' the official noted. The bond issue was expected in December/January, but was postponed till the new financial year. The resource mobilisation target for fiscal1998-99 was mopped through a series of private placements and foreign currency loans from ADB. ``The private placement route is a cheaper option as the servicing and transaction cost is much less, however, a public issue is also necessary to maintain the investor base,'' the official said. He hinted that the bond offering would be a small issue of around Rs 300 crore.

According to the official, IFCI's large equity base post-rights is not a cause of concern. ``At any stage, if we feel that our business is being affected by our equity base, we will buyback the shares,'' he said. IFCI's total paid-up capital is around Rs 353 crore which will swell to over Rs 700 crore after the 1:1 rights issue.

IDBI has an equity base of Rs 660 crore, while that of ICICI is Rs 478 crore.When asked about the means of financing such a buyback, the official said IFCI had about Rs 4000 crore locked in because of various provisioning norms. ``Once the economy turns for the better, we will have a lot of surplus money in ourhands,'' he noted.

So far as subscription to the Rs 353 crore rights issue is concerned, the official said commitments had been received from most of the institutional shareholders. IDBI, which holds around 28 per cent stake in IFCI, had earlier said it would subscribe to its entire rights entitlement. ``We are very hopeful that others will follow suit,'' he added.

Life Insurance Corporation and GIC hold around 13 per cent, Unit Trust of India 2.5 per cent, while the public shareholding is around 34 per cent. The balance is hled by nationalised banks, private and public sector mutual funds as well as foreign institutional investors.

On renunciations from the public, the official said marketing efforts are underway to sell the issue. ``We think the intrinsic worth of our share is much more than the current valuation. We are receiving many investor queries regarding our rights issue and are, therefore, hopeful of a favouravle response,'' he said.

He, however, refused to comment on what would happen incase of an undersubscription - whether the institutional shareholders would apply for additional shares and, specifically, if IDBI would hike its stake through the rights issue.

``That is something which will be decided by our shareholders, we have no say in the matter,'' he added. Apart from the rights issue and the retail bond issue, IFCI is also planning to unveil a fixed deposit programme for high networth individuals. IDBI and ICICI have a similar scheme, but both are open to the public.