Reliance Industries launches Rs 12,500 crore bond issue at 7.47% coupon
India's largest company Reliance Industries is raising $1.5 billion through five-year rupee bonds with a 7.47% interest rate after an absence of three years.
Reliance Industries, India's most valuable corporation by market cap, announced plans to issue five-year rupee bonds worth Rs 12,500 crore at an annual coupon rate of 7.47%. This marks the company's return to the domestic bond market following a three-year gap. Bond sources indicate the invitation for bids will run during the week ending September 18. If successful, this single-tranche issue would represent the largest amount raised by a rated corporate entity in the local market since November 2023.
The announcement comes as banks face record fund surpluses and borrowers attempt to secure capital before potential interest rate hikes impact lending costs. Reliance joins other major entities like Adani Airport Holdings and Larsen & Toubro, which are also pursuing bond financing in the near term. Venkatakrashnan Srinivasan of Rockfort Fincap LLP noted that large borrowers are eager to lock in medium-term funding rates given current pricing expectations for monetary tightening.
Recent data shows five-year AAA PSU corporate bond yields fell from 7.85% on June 3 to 7.68% on September 7, a reduction of roughly 17 basis points. Analysts suggest this liquidity shift is driven by inflows from foreign exchange programs and a desire among investors to deploy excess capital before rates rise.
