Reliance Industries Ltd (RIL) on Thursday raised ₹8,500 crore through bonds after the Reserve Bank of India decided to provide additional liquidity to banks to fund companies impacted by covid-19.
RIL, with a long-term debt rating of AAA, issued bonds in two parts, one with floating interest rate and the other at a fixed rate, according to a debt capital market banker. The floating rate issue saw the company raise ₹4,500 crore for a coupon rate of 7.2%. This is 280 basis points over the repo rate of 4.4%. The fixed rate issue saw it raise ₹4,000 crore for a three-year period at a fixed coupon rate of 7.2%.
According to bankers, the money raised through this bond issue will primarily go towards refinancing its existing debt. RIL had a debt of ₹1.54 trillion at the end of 2019.
“The company has debt repayment obligations of about ₹50,000 crore in fiscal 2021, and will likely undertake moderate capex. Crisil believes the company has sufficient accruals, and cash and cash equivalents, to meet its repayment obligations and meet its capex requirements," the rating agency said in its 6 April report. “RIL’s leverage is relatively high for its rating category, reflected in its net debt to Ebitda (earnings before interest, tax, depreciation and amortization) of about 2.1 times expected for fiscal 2020."
NTPC Ltd also raised ₹4,374 crore for three years at a coupon rate of 6.55%, while National Bank for Agriculture and Rural Development raised ₹2,500 crore for three years at 6.5%.