RIL may raise Rs 10,000 crore from bond sale
By MYBRANDBOOK
Reliance Industries (RIL) along with banks is planning to raise ₹10,000 crore in a bond sale this week, equivalent to about a tenth of the special funding facility provided by the regulator, underscoring the possibility of top-rated and state-run companies picking up most of the amount.
The Reserve Bank of India (RBI) is lending as much as ₹1 lakh crore under Targeted Long Term Repo Operations (TLTRO) to lower yields in the secondary market and invest in primary issues. The move was announced on March 27 along with a cut in the policy rate to a record low as part of initiatives to help borrowers cope with the economic damage inflicted by the Covid-19 pandemic.
RIL is finalising details of the plan with Axis Bank, HDFC Bank, ICICI Bank and State Bank of India that could potentially feature the lowest cost of borrowing in years, said people familiar with the discussions. To be sure, the banks’ total subscription to the RIL bond sale need not necessarily be entirely from the TLTRO funds. RIL, ICICI Bank, HDFC Bank, SBI and SBI Caps did not reply to ET’s mailed queries. Axis Bank declined to comment.
Mid-sized corporates and non banking finance companies (NBFCs) fear that a substantial chunk will go to big companies and state-backed firms. With risk aversion at its peak, banks continue to shun small borrowers and lean toward triple-A-rated companies.
“Banks have a clear arbitrage here as they could park the money at least 260 basis points higher rate,” said Ajay Manglunia, managing director and head of fixed income at JM Financial.
"While the absence of mark-to-market obligation makes it more attractive for banks, corporations too avail cheaper money,” he concluded.
The spread or differential between the benchmark bond and top rated corporate papers narrowed to 80-90 basis points immediately after the March 27 emergency rate cut from 150-200 basis points. A basis point is 0.01 percentage point.
The domination of big firms and state-run companies may crowd out smaller borrowers.
“There is little chance of me getting funds from banks through this TLTRO,” said the chief executive of an NBFC. “If a PFC (Power Finance Corp) and I go for funds to a bank, it is obvious who the banker would prefer.”
The Reserve Bank of India conducted a third TLTRO on Thursday, when another Rs 25,000 crore entered the system. Lenders could raise money at just 4.40%. Banks are mandated to invest half of the sum from TLTRO in primary investment grade corporate bond sales.
"
BREAKING NEWS
TECHNO TRENDS
Legal Battle Over IT Act Intensifies Amid Musk’s India Plans
The outcome of the legal dispute between X Corp and the Indian government c...
Wipro inks 10-year deal with Phoenix Group's ReAssure UK worth
The agreement, executed through Wipro and its 100% subsidiary,...
Centre announces that DPDP Rules nearing Finalisation by April
The government seeks to refine the rules for robust data protection, ensuri...
Home Ministry cracks down on PoS agents in digital arrest scam
Digital arrest scams are a growing cybercrime where victims are coerced or ...
E-Magazine
TECHNOTAINMENT
Hrithik Roshan to endorse RuPay as Brand Ambassador
RuPay is reportedly planning to feature Bollywood superstar Hrithik Rosha
India Today Group launches – AI Pop Stars
Staying true to our industry leadership position in using cutting-edge tech
MOVERS & SHAKERS
TelioLabs ropes in Phaniraj V A as the Group CEO
TelioLabs has announced the onboarding of Phaniraj V A as its new Group CE
Wipro Appoints Amit Kumar as Managing Partner and Global Head
Wipro Limited (NYSE: WIT, BSE: 507685, NSE: WIPRO), a leading technology s
OPEN YOUR EYES
INTERVIEWS
Acer addresses evolving customer needs by consistently pushing
Acer offers a comprehensive range of products under one roof, including des
Delivering Critical Business Communication Solutions to Enterp
Arya Omnitalk and Syntel’s comprehensive suite of solutions and more than
HOT PICK
MSI Announces the availability of RTX 50 series of laptops in
MSI, the innovative computing manufacturer in gaming, creator
Nothing Phone (3a) goes on sale today, starting at Rs 19,999
The phone was launched on March 4, featuring a 50MP main, ultra-wide, and t
MAKE IN INDIA BRANDS
TATA CONSULTANCY SERVICES
VERSA NETWORKS INDIA PVT. LTD.
TALLY SOLUTIONS PVT. LTD.
LAVA INTERNATIONAL LTD.
EMINENT CIO'S OF INDIA
ICONS OF INDIA
Icons Of India : PRATIVA MOHAPATRA
Prativa is a transformational leader with an incredible breadth of exp...
ICONS OF INDIA : SANDIP PATEL
Sandip Patel is the Managing Director for IBM India & South Asia regio...
ICONS OF INDIA : RITESH AGARWAL
Ritesh Agarwal is an Indian billionaire entrepreneur and the founder a...
PARTNER SPEAKERS
PSU
PFC - Power Finance Corporation Ltd
PFC is a leading financial institution in India specializing in power ...
IREDA - Indian Renewable Energy Development Agency Limited
IREDA is a specialized financial institution in India that facilitates...
UIDAI - Unique Identification Authority of India
UIDAI and the Aadhaar system represent a significant milestone in Indi...
VIDEOS
Top 25 Brands
Global Indian industry
Indian Tech Talent Excelling The Tech World - Soni Jiandani, Co-Founder- Pensando Systems
Soni Jiandani, Co-Founder of Pensando Systems, is a tech visionary ren...
Indian Tech Talent Excelling The Tech World - JAYASHREE ULLAL, President and CEO - Arista Network
Jayshree V. Ullal is a British-American billionaire businesswoman, ser...
Indian Tech Talent Excelling The Tech World - Steve Sanghi, Executive Chair, Microchip
Steve Sanghi, the Executive Chair of Microchip Technology, has been a ...
ITFORUM 2025
CMO of the Year
WOMEN LEADERSHIP
IMAGE GALLERY
TRENDS IN TECHNOLOGY
MORE VIDEOS
ADVERTISEMENTS
TECHNOLOGY DISRUPTION
UNICORNS REVOLUTIONISING
of images belongs to the respective copyright holders
