Top-rated Reliance Industries added some much-needed sparkle to an otherwise sluggish debt market on Diwali, raising about Rs 3,000 crore in bond sales Tuesday.
Those papers offered 8.95% with 10-year maturity at a time when investors are mostly seen shying away from making new investments due to liquidity concerns.
ICICI Bank has helped arrange the issue as it initially subscribed to papers on the electronic bidding platform. Later, top mutual funds and insurers were seen buying the long-dated Reliance papers from the bank.
An email sent to Reliance Industries and ICICI Bank remained unanswered until the publication of this report.
“The company has obtained fair pricing for the bonds. Yields could be about five-six basis points higher than its secondary levels,” said a domestic investment banker, who was not involved in the fund raising.
Capacity additions and higher utilization could see Reliances consolidated operating profit rise 18% in FY19, the management hinted earlier in October.
Reliance invested more than $30 billion over the past five years across its different verticals, such as refining, chemicals, retailing and telecom, to increase capacity, show reports.
Earlier this year, Reliance had decided to raise up to Rs 20,000 crore through a non-convertible debenture (NCD) issue in this financial year. Last month, Reliance raised about Rs 3,500 through bonds, offering a rate exceeding 9%.
These corporate bonds are priced after adding a mark-up over the benchmark yield, which has fallen 43 basis points lately. Bond prices and yields move in opposite directions.
In the September quarter, Reliances net profit rose 17.4% to Rs 9,516 crore, aided by higher price realizations for petrochemicals and refinery products.
Reliance Industries may soon buy controlling stakes in two of Indias largest cable TV and broadband service providers, Hathway Cable & Datacom and DEN Networks, as it seeks to expand the coverage of its ambitious high-speed broadband business, ET reported on October 16.
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