Reliance Jio Infocomm is opting for the way of Bonds to raise about Rs 2,000 crore. This move came after Reserve Bank of India made an escalation to the policy rate for the first time in more than four years last week. This info came from multiple market insiders. The company conveyed the information through a dedicated communique to qualified institutional buyers via stock exchanges that the bonds would have a tenure of these bonds would be three years and will be sold in the exchange with a coupon of 8.7%. One of the sources who made the information public also added “The company will receive subscriptions whoever bids at 8.7%. It would be up for bidding on Thursday.”
This new development of bond issuance by Jio is creating a new wave in the market since even the lenders who are wary of lending due to the unsettling condition in the tech and telecom market are taking an interest in this deal. A state-owned back which was first not likely to lend due to high risk might chip in some cash to buy the entire pile because of the triple-A rating backing the company.
As per an ET report, the sources said that the money raised would be used for the telco’s expansion which already has 186.6 million subscribers in the country. When posed a question from ET, Reliance Industries, the parent company of Reliance Jio Infocomm did not respond to any queries.
The Mukesh Ambani led telco has been on a funding frenzy in order to raise money for the expansion of its company. An executive highlighted that Jio is looking for chances to diversify its borrowing bases As per the exec’s consensus entering a new market for borrowing is supposed to help the company in the long run.
Not so long ago, Reliance Jio has already raised $500 million through a syndicated Samurai loan from three Japanese banks, including Bank of Tokyo-Mitsubishi UFJ (MUFG), Sumitomo Mitsui Banking Corporation (SMBC) and Mizuho Bank. The loan which Reliance Jio signed upon is for a seven-year period. As per the annual reports of FY 2018-19, Reliance Industries has sought shareholder approval to raise an amount as high as Rs 20,000 crore through a non-convertible debenture (NCD) issue in 2018-19.
The company said “The board may, at an appropriate time, consider offering or inviting subscriptions for secured or unsecured redeemable non-convertible debentures, in one or more series or tranches on private placement, issuable or redeemable at par, in order to augment long-term resources for financing inter alia the ongoing capital expenditure and for general corporate purposes.”