Reliance Industries looks to raise Rs 25,000 crore debt

Reliance Industries plans to raise Rs 25,000 crore from privately placed debt market. It is expected to utilise the proceedings for servicing debt or investment in Reliance Jio.

Reliance Industries Ltd (RIL) Chairman Mukesh Ambani. Photo: IANS

Key Highlights:

Reliance Industries plans to raise Rs 25,000 crore through private placement

RIL's outstanding debt stands at Rs 196,601 crore in FY17

RIL has invested Rs 157,925 crore in RJio in last four years

Reliance Industries (RIL) is looking to raise Rs 25000 crore in debt, the company said.

RIL said, “The board of directors of the company to offer or invite subscriptions for secured / unsecured redeemable non-convertible debentures, in one or more series / tranches, of an aggregate nominal value up to Rs 25,000 crore, on private placement.”

In the financial audit report of RIL for FY17, RIL said that its outstanding debt as on March 31, 2017 stood at Rs 1,96,601 crore, higher by 8.82% compared to Rs 180,665 crore as on March 2016.

However, interest cost was lower at Rs 556 crore in FY17, compared to Rs 842 crore in the corresponding period of the previous year,

Interestingly, cash and cash equivalents available with RIL was at Rs 77,226 crore as on March 2017, lower by 14.16% from Rs 89,969 crore as on March 2016.

RIL said in the report, “These were in bank deposits, mutual funds, CDs and Government Bonds and other marketable securities.”

In the month of January 2017, RIL had said that it plans to raise nearly Rs 30,000 crore through a rights issue of optionally convertible preference shares in a move to further invest in Reliance Jio Infocomm - its telecom arm.

In a span of four years, RIL has invested about $25 billion (about Rs 1,57,925 crore) in Reliance Jio.

Private Placement is a way of raising capital through an offer for subscribing to securities by a select investor class like banks, mutual funds, insurance companies and pension funds. They are not made available for subscription to public at large in the open market.

According to Pranav Haldea, Managing Director of PRIME Database, on an year-on-year basis, mobilisation through bonds via private placement was at Rs 7.03 lakh crore in FY17 a whopping rise of 43% as against Rs 4.92 lakh crore in FY16.

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