InvestorQ : Why is Reliance Industries planning to raise Rs.9000 crore and how will these funds be utilized?
Niti Shenoi made post

Why is Reliance Industries planning to raise Rs.9000 crore and how will these funds be utilized?

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Archita Jajjoo answered.
2 years ago
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RIL has normally waited to tap bond markets when cost of funds is at a multi-year low. With cheap funds flooding the debt market through the targeted long-term repo operations route, Reliance plans to raise Rs.9,000 crore through an NCD sale to refinance the existing high-cost rupee debt. RIL has a massive debt on the books to the tune of Rs.160,000 crore. The fund raising of Rs.9000 crore will be executed through the non-convertible debenture (NCD) route on April 16 with the proceeds from the debt sale being used to repay existing rupee debt. It will be equally divided into a fixed rate tranche and floating rate tranche. The coupon offered is a rather steep rate of 7.20%, which represents a 280 bps premium to the repo rate of 4.4%. The entire issue will be done through the private placement route. Each NCD will have a face value of Rs.10 lakh each. The issue will also have a 50% greenshoe option. That means; along the Rs.9000 crore NCD issue, the company reserves the right to collect another Rs.4500 crore from the process.

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