Mukesh Ambani's Reliance Industries is planning another significant rupee bond sale, aiming to raise around 100 billion rupees, equivalent to approximately $1.04 billion. This will be through 10-year notes carrying an annual coupon of 7.90%. Merchant bankers expect bids for this offering in late September or early October, with a strategic goal to finalize the borrowing before the Reserve Bank of India's monetary policy decision on October 7.
This follows a previous offering just two weeks prior, where Reliance allotted 120 billion rupees (approximately $1.25 billion) of five-year bonds at 7.47%. Combined, these two transactions would secure about 220 billion rupees, or roughly $2.3 billion, in fresh rupee debt for the conglomerate. Large private-sector banks are anticipated to arrange and partially subscribe to this new issue, mirroring their involvement in the earlier sale.
The 7.90% coupon for the upcoming 10-year bonds is considered competitive, sitting seven basis points below the average yield of 7.97% for top-rated Indian corporate bonds of similar maturity on September 23. This move is driven by the attractiveness of rupee borrowing, as relatively favorable domestic yields contrast with sharply higher US Treasury yields, making dollar debt less appealing. Raising funds in rupees also helps mitigate currency risk, especially with the rupee trading near 96 to the dollar.
While the specific use of the proceeds has not been disclosed, Reliance is undergoing a capital-intensive phase across its energy, Jio telecom, retail, and new energy segments. The dual-tranche approach, with five-year and 10-year maturities, helps spread repayment dates, supporting investments with longer gestation periods. This latest issuance would increase Reliance's outstanding bonds to 540 billion rupees, though this figure should not be confused with the group's total borrowings or net debt.
