In the largest corporate bond issue, Reliance Industries Ltd. aims to raise up to Rs 20,000 crore through non-convertible debentures maturing in 10 years.
This is one of the rare bond issuances with a 10-year maturity, as corporate bonds lower the cost of long-term funding.
The maturity date of this bond is Nov. 10, 2033, and will be redeemed in a phased manner the same year, according to RIL’s issue document seen by BQ Prime.
The partly paid bonds will open for sale on Thursday, the document said. The fundraising amount includes the base issue of Rs 10,000 crore, with an alternative to retain the green shoe option up to Rs 10,000 crore.
A partly paid bond is bought using installment payments, unlike standard bonds, where the investor pays the full amount at the face value.
The entire net proceeds of the debenture issue will be utilised for refinancing existing borrowings maturing this year. The other way to deploy these funds would be towards ongoing capital expenditure requirements, investments, or lending to domestic subsidiaries where RIL holds a majority stake.
Up to 25% of the net proceeds could also be used for “any other purpose in the ordinary course of business”.
The bonds are rated ‘AAA’ by CareEdge Ratings and will be allotted on Friday.
(This is a developing story).