Reliance Industries Ltd., controlled by billionaire Mukesh Ambani, is set to issue a $1.3 billion bond, making it India's largest bond offering this year. This will be the company's first bond sale since 2023, and it aims to use the proceeds primarily for refinancing existing borrowings. The proposed bond is anticipated to have strong investor interest due to Reliance's solid financial standing and credit ratings, which are often above India's sovereign rating.
Reliance has a history of tapping both domestic and international bond markets for significant capital. In January 2022, the company raised a record $4 billion through a foreign currency bond issuance, which was the largest ever by an Indian entity at the time. This issuance included tranches of 10, 30, and 40 years, with interest rates of 2.875%, 3.625%, and 3.75%, respectively. The $4 billion was used to retire existing debt, including a $1.5 billion loan due in February, and attracted orders from over 200 accounts across Asia (53%), Europe (14%), and the United States (33%). The bonds were rated BBB+ by S&P and Baa2 by Moody's.
More recently, in November 2023, Reliance filed for a record 200 billion rupee ($2.4 billion) rupee-denominated bond sale, with a base size of 100 billion rupees and an option to retain another 100 billion rupees. These 10-year bonds received AAA ratings with a stable outlook from Crisil and CareEdge. Additionally, in a separate development, Reliance was reported to be planning to raise approximately 180 billion rupees ($2.06 billion) through asset-backed securities by mid-September, with Barclays Plc arranging the transaction. These securities would be backed by loans from the conglomerate's infrastructure and telecommunications divisions and would have a maturity period of three to five years.
Reliance's consistent activity in the bond market underscores its strategic approach to debt management and capital financing. The company often seeks to refinance maturing debt and fund its significant investments, particularly in its expanding telecom and petrochemicals sectors. The market generally shows high appetite for Reliance's issuances, benefiting from its strong credit profile and the overall interest in Indian corporate debt.
