Calcutta, Sept. 26: Leading Indian and foreign banks, including Citigroup, Deutsche Bank, Syndicate Bank, ICICI Bank, Syndicate Bank and State Bank of India, have evinced interest to participate in the securitisation deal by the West Bengal Industrial Development Corporation (WBIDC).
This is for the first time that a state government outfit in West Bengal is taking an initiative to securitise its asset portfolio.
WBIDC sources said they have appointed CARE to carry out a rating of the receivables of the corporation.
“We have given CARE the necessary information on our asset portfolio. They will soon start the rating process following which we will appoint a merchant banker. We expect the securitisation deal to be completed by November,” said a senior WBIDC official.
A few financial institutions have also approached WBIDC to participate in the securitisation programme. Banks and financial institutions will give loans against these assets.
To begin with, WBIDC has decided to securitise Rs 20 crore of its assets. “The amount will be enhanced based on funds requirements,” said the official.
The move by WBIDC will reduce the corporation’s over-dependence on the government’s financial assistance, which has gone down drastically in the last few years.
The exercise will also keep a check on the equity of the corporation. “If the government gives us money it gets added to the current equity. We do not want to have a bloated equity,” the official added. The present equity of WBIDC is Rs 224 crore.
Senior officials of State Bank of India said, “Securitisation has opened a new avenue of funding. We are keen to follow it.”
The funds that will be available from the exercise will be used for funding units in the iron and steel, plastic, information technology, food and agro-processing industries.
The corporation has disbursed Rs 90 crore in the current financial year.
The sanctions will be more than Rs 100 crore. In 2002-03, the corporation had sanctioned Rs 100 crore and disbursed Rs 65 crore.
The corporation had earned a net profit of Rs 3.15 crore in the last financial year after 18 years.
Regular monitoring, prompt follow-up and vigorous recovery efforts have led to an increase in total recovery from Rs 46.88 crore to Rs 55.08 crore in financial year 2002-03.