Reliance Industries Bumper-Bond Issue: RIL To Raise Up To Rs 20,000 Crore Via Bonds Sale, Says Report

Mukesh Ambani-led Reliance Industries is reportedly planning to raise up to Rs 20,000 crore through the sale of domestic rupee-denominated bonds having a maturity period of 10 years in its largest-ever domestic bond sale this week.

The sale of non-convertible debentures (NCD) by RIL is expected to be the biggest such domestic issuance by a non-BFSI private entity in the country where companies are asked by regulators to rely on market instruments to help create a corporate bond market that reflects the breadth and stature of Asia's third largest economy.

On Wednesday, the share price of Reliance Industries was trading 0.59% higher at Rs 2338 per share at 12:54 pm IST.

The fund-raising plan comes at a time when Reliance Jio, India's top telco, has been rapidly expanding 5G networks and looking at nationwide coverage in a few months.

According to the Economic Times report citing an information document accessed by it, the sale of NCD will happen through the electronic mechanism on the BSE's bond platform on November 9 from 10:30-11:30 am. The issue has a base size of Rs 10,000 crore and a green shoe option of Rs 10,000 crore.

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 (NCDs) and are ranked equal to the existing or future secured loans or NCDs issued or to be issued by Reliance.

If Reliance raises the complete amount of Rs 20,000 crore via the issuance of domestic bonds, it would mark the largest-ever fund-raising by an Indian corporate through bonds beyond the conventional lending sector of banking and financial services.

Last year, HDFC raised Rs 25,000 crore through bonds as the housing financier looked to collect funds prior to its merger with HDFC Bank.

RIL's last bond issuance in the Indian debt markets was in April 2020 when Ambani- owned company had raised Rs 2,795 crore via five-year bonds at a coupon rate of 7.40%. According to Reliance's information document the company is expected to utilize 100% of the funds for refinancing existing borrowings.

Around 50% of the proceeds could be used for ongoing capex while the rest 50% of the funds will be used for making investments in or lending to domestic subsidiaries where the shareholding of the parent company is over 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 include all Qualified Institutional Buyers (QIB) and any non-QIB investors particularly mapped by Reliance on the BSE Bond EBP Platform, according to the report.