Reliance raises $4 bn in India's largest foreign currency bonds issue

RELIANCE Industries Ltd, India's most valuable company, on Thursday (6) said it has raised $4 billion (£2.96 bn) debt in the largest ever foreign currency bonds issuance from the country.

The oil-to-telecom conglomerate raised the money in foreign currency denominated bonds and plans to use the proceeds to retire existing borrowings.

The issue was "nearly three times oversubscribed with a peak order book aggregating $11.5 billion (£8.5 bn) and was priced through RIL's secondary curve," a company statement said.

Reliance raised $1.5 bn (£1.11 bn) at a coupon rate of 2.875 per cent, $1.75 bn (£1.29 bn) at 3.625 per cent and $750 million (£554.64m) at 3.75 per cent. The notes are due to repayment between 2032 and 2062.

"The notes have been priced at 120 basis points, 160 basis points and 170 basis points over the respective US Treasuries benchmark," it said.

The notes are rated BBB+ by S&P and Baa2 by Moody's.

With this, Reliance has joined a select group of issuers from Asia to have made mega bond issuances.

Reliance is a net-zero debt firm with a cash balance of Rs 2.59 trillion (£23 bn), exceeding its gross debt of Rs 2.55 trillion (£22 bn) as of September 30, 2021.

Its existing cash, along with expected cash flows from operations, will be sufficient to cover its cash outflows for capital spending and debt maturities in the next 18 months, Moody's Investors Service had said earlier this week.

In November 2021, it received around Rs 266 bn (£2.24 bn) in proceeds from the final call on its rights issue, which further enhanced its liquidity.

Reliance said interest on the notes will be payable semi-annually in arrears, and the notes shall rank pari passu with all other unsecured and unsubordinated obligations of the firm.

The notes received orders from over 200 accounts in Asia, Europe and the United States.

Srikanth Venkatachari, joint chief financial officer of RIL, said, “the support received from the marquee international capital market investors is reflective of the strength of our underlying businesses with established growth platforms across energy, consumer and technology as well as the robustness of our balance sheet. This issue continues the tradition of Reliance being a sophisticated and innovative issuer across the capital structure."

(PTI)