Reliance plans $1.3 billion bond in first sale since 2023

Billionaire Mukesh Ambani’s Reliance Industries Ltd. is planning to raise as much as $1.3 billion via local-currency bonds as early as next week, according to people familiar with the matter, which would make it the largest listed deal in the market this year.

The company plans to raise the funds through AAA rated notes due in five years at a coupon of 7.47%, the people said, asking not to be identified as the details are private. The rate is much lower than the 7.87% average yield on top-rated five-year corporate bond ended on Monday.

The issuance, the conglomerate’s first offering since November 2023, will likely provide a boost to local debt market after a slow start this year, as companies turned to bank loans to meet financing needs amid relatively lower borrowing rates.

Reliance joins other Indian companies considering bond offerings amid expectations that the Reserve Bank of India may tighten monetary policy later this year as inflation risks mount.

“Reliance rupee bond issue will set a benchmark for top-rated issuers,” said Ajay Manglunia, executive director at Capri Global Capital Ltd. “Fund houses will rush to grab a piece of debt.”

The bond offering coincides with another major fundraising by the group. Jio Platforms Ltd., the digital and telecommunications arm of Reliance, could raise as much as $4 billion in its initial public offering as early as November, people familiar with the transaction said earlier.

Indian companies have borrowed 8.9 trillion rupees via domestic bonds so far this year, down about 11% from a year earlier, according to data compiled by Bloomberg. The yield on top-rated three-year company notes rose 70 basis points over the past year. Meanwhile, the weighted average rate on fresh rupee loans sanctioned by banks declined 29 basis points in 12 months through July, latest central bank data showed.

Axis Bank Ltd., ICICI Bank Ltd., HDFC Bank Ltd. and YES Bank Ltd. are the arrangers to Reliance’s issuance, the people said. The offer size is ₹100 billion with a greenshoe option to raise another ₹25 billion, they said.

A Reliance spokesperson didn’t offer any immediate comment, while representatives at Axis, ICICI, HDFC and YES didn’t immediately respond to emails seeking comment.

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