SCHEMES OF ASSISTANCE
Objective
To provide long term finance for new projects and expansion, diversification and modernisation of existing projects.
Types of Assistance
Term loan, underwriting, direct subscription to equity capital and deferred payment guarantee.
Eligibility
Any industrial concern conforming to the definition in Section 2(c) of IDBI Act.
Nature of Assistance
Rupee and foreign currency loan
Promoters' Contribution
25% of the project cost-minimum normally expected.
Debt Equity Ratio
1.5:1
Interest Rate
Rupee Loan :
Based on Minimum Term Lending Rate fixed from time to time. Actual rate within the prevailing rate band would depend upon creditworthiness of borrower and risk perception. Interest payable quarterly
Foreign Currency Loan :
Floating rate based on LIBOR depending upon the source of the currency plus a fixed spread according to the risk perception and maturity of the loan.
Up-front Fee
1% of loan amount.
Commitment Charge
0.25% on the undrawn portion of loan payable from the date of signing of the loan agreement.
Underwriting Commission
2.5% of the underwritten amount
Conversion Option
 Where overrun in project cost, 20% of additional assistance subject to certain criteria
In case of default
Security
First charge on movable and immovable fixed assets.
Repayment
In quarterly instalments to be fixed on case to case basis depending on projected cash flow of the borrower.
Documentation
Loan agreement Deed of hypothecation
Personal guarantee from main promoters, wherever required
Undertakings from promoters for:
Undertaking from MD for non-receipt of commission, if company is in default to IDBI
No Objection Certificate from IT Dept. under Section 281(i)(ii) of IT Act
Resolution under Section 293 (1)(a) and 293(1)(d) of Company's Act Corporate Loan
Corporate medium / short Loan Scheme
1 Purpose : For providing finance such as normal capital expenditure, working capital margin, shortfall in working capital and general corporate purposes including expenses on Voluntary Retirement Scheme and funding business acquisition where no tangible asset creation is envisaged.
2 Eligibility Criteria:
i. Corporates : Corporates with minimum 5 years operations, generally profitable and satisfactory credit record
ii. Credit Rating : Minimum 'BBB' (read as Triple B) by rating agency / CRMG for assisted companies and 'A-' (read as A minus) for non-assisted companies, as long term rating. If company not assisted but group dealing with IDBI, relaxation could be considered on merits (for rating up to BBB).
iii. Net Worth : Not less than Rs.10 crore (only equity and free reserves to be included)
iv. Long term Debt to Equity (DER) : Maximum 1.25:1
v. Current ratio : Minimum 1.1:1
vi. Interest Cover : Minimum 2:1
3 Terms of Assistance
i. Amount : Minimum Rs.5 crore for non-assisted companies.
ii. Security : DP Note and any one of the following or in combination which would be decided keeping in view the risk factors:
i. Creation/extension of first charge pari passu with the existing lenders with minimum security margin of 25%
ii. Corporate guarantee of a well rated company of the Group.
iii. Pledge of listed shares with a minimum margin of 40%
iv. Escrow of receivables of good corporates.
Personal guarantee as additional security where considered necessary.
iii.Repayment period : Upto 5 ½ years from date of first disbursement.
Re-finance
Objective
To finance medium scale industries
Eligible Institutions
Line of Credit (LOC) to all SFCs/SIDCs
Refinance to banks only in States of Bihar, Himachal Pradesh, Jammu & Kashmir, Orissa and States in the North East.
Eligibility
Industrial concern as defined under Sec. 2(c) of IDBI Act / SFCs Act
Should not be SSI
Cost of project not to exceed Rs. 12 crore under LOC scheme.
Proposals meeting the norms and parameters of Refinance Scheme
Nature of Assistance
Rupee Loan
Extent of Refinance
SFCs (Cos / Others)- 240 / 120 Lakh
Twin-Function IDCs (TFIDCs)- 250 Lakh
SIDCs - 400 Lakh
Promoters' Contribution
25% of project cost.
Debt Equity Ratio
Not more than 2:1.
Interest Rate
Rate of LOC / refinance to primary lenders announced from time-to-time by IDBI based on its Minimum Term Lending Rate.
Up-front Fee
1% on each disbursement under LOC.
Repayment Period
LOC
Maximum 8 years
Refinance
Maximum 10 years
Normal repayment period : 3-10 years
Security
Credit risk to be borne by the primary lenders
However, primary lenders hold the securities mentioned in the primary lenders' application (including the properties mentioned in the security documents) on behalf of IDBI as security for the LOC / Refinance.
Documentation
General Agreement with the eligible institutions / banks for LOC / refinance
Borrower has to enter into an agreement with primary lender and execute deed of hypothecation (as per primary lender's requirement)
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