IDBI plans infotech subsidiary

IDBI plans infotech subsidiary
PTI & EEB

MUMBAI, DECEMBER 31: The Industrial Development Bank of India (IDBI) has cleared a proposal to set up an information technology (IT) subsidiary for providing IT-related services to the financial institution (FI) and its clients.

The company would have strategic alliances with international IT majors, IDBI sources said. IDBI board in a meeting yesterday also cleared a proposal to set up a Rs 1,000 crore fund to provide equity support to new enterprises as well as companies planning viable expansion projects.

The FI sanctioned term loans to Reliance Industries Ltd (RIL) for its Patalganga power project in Maharashtra and the Birla AT&T telecom project. The loan, to the power project amounts to Rs 425 crore, the sources said.

IDBI has also decided finance a basic telecom service provider for the first time. In a landmark decision taken by the development finance institution's board of directors in Mumbai on Thursday, IDBI has sanctioned almost Rs 120 crore towards the Rs 850 crore initial public offerplanned by Birla AT&T. The IPO is expected to hit the market in the first quarter of the next fiscal.

"IDBI will provide underwriting commitment of almost Rs 70 crore to the IPO. In addition to this, IDBI will also be taking Rs 50 crore exposure in the company in the form of optionally convertible cumulative preference shares (OCCPS)," said an IDBI official.

However, the public offer by Birla AT&T is subject to appraisal by another financial institution, Infrastructure Development Finance Corporation (IDFC), sources from IDBI said. Birla AT&T, the cellular service provider in Maharashtra and Goa (excluding Mumbai), had earlier decided to raise Rs 850 crore through a mix of private placement of equity and IPO. The company had mandated JM Morgan Stanley for structuring the mobilisation.