Key Takeaways
- Reliance Industries plans to raise $1.32 billion through a rupee bond sale.
- The sale will be the largest single-tranche fundraising by a rated firm since November 2023.
- The move comes as yields on local bonds have declined, making rupee debt cheaper than dollar debt.
Billionaire Mukesh Ambani’s Reliance Industries is set to return to India’s rupee bond market after nearly three years, with plans to raise 125 billion rupees ($1.32 billion) through a sale of five-year notes, according to five merchant bankers.
The oil-to-telecom conglomerate aims to issue these notes at an annual coupon of 7.47%, and is set to invite bids from investors in the week ending September 18.
This will mark Reliance’s first rupee bond offering since November 2023, when it raised 200 billion rupees, the largest local-currency debt sale by an Indian non-financial company at the time.
The decision to launch this bond sale comes amid a sharp decline in yields on up to five-year bonds, making such funding cheaper than dollar debt sales, the bankers noted.
A five-year government bond yield has plunged 33 basis points since the start of June, mainly due to mammoth dollar inflows under the central bank’s subsidised schemes.
Flows from the non-resident dollar deposit scheme have pulled down local yields, while higher US Treasury rates have increased the cost of dollar funding for Indian borrowers.
Large private banks are acting as arrangers for the deal and are also set to partly subscribe to these bonds, the bankers added.
Reliance Industries is also mulling a 10-year bond issue and is in discussions with bankers and investors about this potential future sale.
