Commenting on the news further, RK Bansal, executive director, IDBI, said that with 65% shareholding with the government, FPO is best suitable for raising the funds. However, depending upon the right situation and right time, the bank might think of raising some equities too.
Following the trend, Bank of India's board has given the approval to raise the funds through FPO, while Indian Bank is likely to list its FPO by the end of August or early September. Canara Bank, on the other hand, had already raised a $443 million by selling shares to institutional investors in March.
Therefore, seeking inspiration from its contemporary, IDBI hopes to raise $1 billion through medium term notes in the fiscal year that ends in March 2012 On the point of selling the bank's share, Bansal commented that the bank would prefer waiting for the market to improve before taking any steps towards selling of the shares.
He further added that the IDBI is currently working on the its growth by concentrating more on its branch production and the low-cost current account savings account (CASA). IDBI currently has 850 branches and aims to add 250 more to the list by March.