2 hrs ago
SBI leads demand for Reliance Industries’ ₹13,000-crore bond issue
Reliance Industries borrowed ₹13,000 crore by selling 10-year bonds.
State Bank of India reportedly bought about 40% of these bonds.
The bonds promise investors an annual payment of 7.90%.
Crisil and CareEdge gave the bonds their highest AAA credit rating.
Other large investors included ICICI Prudential Mutual Fund, SBI Pension Fund, and ICICI Prudential Life Insurance.
Investors wanted the bonds because long-term, high-quality investments are not easy to find.
Indian companies are borrowing domestically before interest-rate conditions could become tighter.
Higher energy prices are contributing to inflation concerns.
The deal came two weeks after Reliance sold ₹12,000 crore of five-year bonds.
State Bank of India reportedly bought nearly ₹5,000 crore, or about 40%, of Reliance Industries’ ₹13,000-crore, 10-year bond issue.
The bonds carried a 7.90% annual coupon and received AAA ratings from Crisil and CareEdge.
ICICI Prudential Mutual Fund, SBI Pension Fund, and ICICI Prudential Life Insurance were also among the largest investors.
Demand was supported by limited availability of long-dated, high-quality bonds, despite the issue pricing at a marginal premium.
The sale followed Reliance Industries’ ₹12,000-crore five-year bond issue two weeks earlier, which carried a 7.47% coupon.
- Who
- Reliance Industries issued the bonds, with State Bank of India reportedly taking the largest share; other major investors included ICICI Prudential Mutual Fund, SBI Pension Fund, and ICICI Prudential Life Insurance.
- What
- Reliance Industries completed a ₹13,000-crore, 10-year domestic bond sale, with State Bank of India reportedly buying nearly 40% of the issue.
- Where
- The bonds were issued in India’s domestic rupee debt market.
- When
- The transaction was completed on Wednesday; it followed Reliance Industries’ five-year bond sale two weeks earlier.
- Why
- Companies are seeking funding before potentially tighter monetary policy, while investors are attracted to scarce long-dated, high-quality bonds.
Key facts
- Issuer
- Reliance Industries
- Issue size
- ₹13,000 crore, also reported as ₹130 billion or about $1.35 billion
- Maturity
- 10 years
- Coupon
- 7.90% annually
- Credit rating
- AAA from Crisil and CareEdge
- Reported SBI investment
- Nearly ₹5,000 crore, or about 40% of the offering
- Previous Reliance issue
- ₹12,000 crore five-year bond sale priced at a 7.47% coupon
Sources
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