Monday, December 11, 2023

RIL: RIL to raise Rs 20,000 crore via bonds

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Mumbai: Mukesh Ambani-owned Reliance Industries plans raising up to ₹20,000 crore in its largest ever domestic bond sale this week, marking the biggest such domestic issuance by a non-BFSI private entity in India where regulators want companies to rely on market instruments to help establish a corporate bond market that reflects the breadth and stature of Asia’s No. 3 economy.The sale of non-convertible debentures (NCD) will take place through the electronic book mechanism on the BSE’s bond platform on November 9 from 10:30-11:30 am, according to an information document accessed by ET. The issue has a base size of ₹10,000 crore and a green shoe option of ₹10,000 crore.

RIL to Raise ₹20,000 cr via Bonds

The bonds are of 10-year maturity and rated AAA with a stable outlook by Crisil and Care Ratings. The instruments are partly paid, secured, redeemable, non-convertible debentures and are ranked equal to the existing or future secured loans or NCDs issued or to be issued by Reliance. If Reliance raises the entire amount of ₹20,000 crore through the issuance, it would mark the largest ever fund-raising through bonds by an Indian corporate beyond the traditional lending sector of banking and financial services.Last year, HDFC had raised ₹25,000 crore through bonds as the housing financier looked to garner funds ahead of its merger with HDFC Bank.

RIL had last tapped the domestic debt markets in April 2020, a month after the national lockdown was imposed to prevent Covid-19 from spreading. Back then, Ambani- owned company had raised ₹2,795 crore through five-year bonds at a coupon rate of 7.40%. Listing out the end-uses of the proceeds from this week’s bond sale, Reliance’s information document said that up to 100% of the funds could be used for refinancing existing borrowings. Up to 50% of the proceeds could be used for ongoing capex while up to 50% of the funds could also be used for making investments in or lending to domestic subsidiaries where the shareholding of the parent company is more than 51%. Up to 25% of the funds raised could be used for any other purpose in the ordinary course of business.

Eligible investors for the bonds are all Qualified Institutional Buyers (QIB) and any non-QIB investors specifically mapped by Reliance on the BSE Bond EBP Platform.

The fund-raising plan comes at a time when Rel Jio, India’s top telco, has been rapidly expanding 5G networks and looking at countrywide coverage in a few months. Jio has launched 5G-based fixed wireless access (FWA) services that will ride on 5G network infrastructure.

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