Reliance Jio Looking to Raise Huge Funds for 5G Rollout: Report

Jio is taking with multiple banks, including Bank of America, BNP Paribas, HSBC, MUFG Bank, DBS Bank, Agricole, Societe Generale and others. The RBI (Reserve Bank of India) doubled the automatic route limit for companies to raise funds to $1.5 billion, and Jio is looking to take advantage of that. 

Highlights

  • Reliance Jio is gearing up for a fast 5G rollout.
  • The telco is looking to raise funds via debt to support the 5G capex.
  • Jio is expected to complete the fundraising by November 2022.

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Reliance Jio

Reliance Jio is gearing up for a fast 5G rollout. The telco is looking to raise funds via debt to support the 5G capex. A few days back, there were reports that Reliance Jio is trying to raise about USD $2.5 billion to purchase 5G network gear from Nokia and Ericsson. Now, a new report suggests that Jio is looking to further raise USD $1.5 billion to fund the 5G capex. The debt levels of the telecom industry were surely expected to grow with the 5G rollout. Specially for Jio, as the telco is deploying 5G SA (standalone), which is completely independent of its 4G network. Jio has already given long-term contracts to Nokia and Ericsson. None of the companies has specified the number of circles that each of the vendors would be working on for Jio.

Jio is in Talks with Multiple Banks to Raise Money via Debt

As per an ET report, Jio is taking with multiple banks, including Bank of America, BNP Paribas, HSBC, MUFG Bank, DBS Bank, Agricole, Societe Generale and others. The RBI (Reserve Bank of India) doubled the automatic route limit for companies to raise funds to $1.5 billion, and Jio is looking to take advantage of that.

Jio is expected to complete the fundraising by November 2022. In a cumulative total, Jio is looking to raise around USD $4 billion. The money will be entirely spent on 5G gear and capex. 5G would require a denser infrastructure and a higher level of fiberisation for the backhaul. Jio should likely be able to raise all the funds comfortably, given its reputation in the market and the free cash flows that the company generates.

Reliance Industries has not said anything officially on the matter. The stock of Reliance Industries is trading at Rs 2455 on Tuesday morning, which is 1.92% in the green.

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