Reliance Jio plans its biggest obligation to refinance financial liabilities


Reliance Jio, owned by billionaire Mukesh Ambani, India’s largest mobile operator, is planning its biggest rupee bond sale in a bid to gain market share.

The company is seeking commitments on Tuesday for up to $671 million of notes maturing in five years with a coupon of 6.20%, according to people familiar with the matter. Jio last tapped the local currency bond market in July 2018 and plans to use proceeds from the currently proposed deal to refinance financial liabilities.

Jio’s entry into the wireless market in 2016 with free calls and ultra-cheap data, sparked a price war in the country and narrowed the telecom space from a dozen players to three carriers of the private sector while others have withdrawn, merged or gone bankrupt. Top-rated company hits debt market as country’s central bank drains excess liquidity from banking system as it normalizes policy, pushing borrowing costs for AAA-rated corporate debt to five years to near a nine-month high.

Jio is gearing up to roll out 5G services in India this year after buying airwaves worth almost $8 billion in March. It was the highest bidder in the latest spectrum auction, underscoring its intention to maintain its edge over its rivals.

Jio’s parent company, Reliance Industries Ltd., has also hired banks to host a series of bond investor calls beginning Tuesday for a possible multi-tranche dollar bond offering. Last week, Reliance Industries Ltd announced on Saturday that it would raise up to $5 billion in foreign currency denominated bonds and use the proceeds to repay existing borrowings.

In a filing, the company said the finance committee of the company’s board of directors at its meeting on Saturday had approved a “proposed issuance of senior unsecured fixed rate dollar-denominated notes from time to time, for a total amount of up to $5 billion, in one or more tranches”.

“The proceeds from the issuance of the notes will be used primarily for the refinancing of existing borrowings, in accordance with applicable law,” he added.

The bond sale is set to become the biggest such borrowing by an Indian company.

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