Industrial Development Bank of India (IDBI) and ICICI Securities (I-Sec) have been short listed for creating and managing the charge of the proposed Rs. 5000 crore bond issue to be floated by the Union Health Ministry. According to informed sources, the ministry has sent a proposal to the two agencies for managing the issue.

The Union Health Ministry, it can be recalled, is to enter the financial market with the launch of a special Rs.5000 crore bond issue to bridge the yawning gap between the need and availability of resources for improving the infrastructure for health care, medical research and family welfare.

Though no information was forthcoming from officials of the two financial companies, it is learnt that the Board of the two companies are considering the same.

The bond is to be secured by creating a charge on the assets in favour of the bond holders. This charge would be rated to inspire confidence and attract a wide range of investors. The bond would also be listed on the stock exchanges to impart liquidity and would enjoy income-tax benefits. The proposed bond is envisaged to be a fixed rate instrument with a duration of seven years and with a call and put option. No information is forthcoming on when the bond would be issued.

This is for the first time the Health Ministry is contemplating such a bond.