The most cash-rich company is also one of the most indebted corporates sitting on debt pile of over Rs 1.54 lakh crore as of March 2020.
According to an exchange filing, RIL is launching a Rs 9,000-crore non-convertible debenture (NCD) issue on April 16 and the proceeds from the debt sale will be used to repay existing rupee debt.
The issue has two components: a Rs 4,500-crore fixed rate tranche and an equal tranche with floating rate and both the issues are offering a coupon of 7.20 per cent-4.40 per cent of repo with a spread of 2.80 per cent.
The NCDs will be issued through a private placement, which will consist of 30,000 unsecured redeemable fixed coupon, non-convertible debentures under the privately placed debentures (PPD) series K1.
Each NCD has a face value of Rs 10 lakh each aggregating to Rs 3,000 crore along with a greenshoe option for oversubscription up to Rs 1,500 crore, aggregating in cash to Rs 4,500 crore.
In the floating interest rate tranche, RIL will issue 35,000 unsecured redeemable, non-convertible debentures under the PPD Series K2 each having a face value of Rs 10 lakh, aggregating in cash to Rs 3,500 crore with an option to retain oversubscription up to Rs 1,000 crore aggregating to Rs 4,500 crore.
If it raises the targeted Rs 9,000 crore, this is nearly a tenth of the Rs 1 lakh crore liquidity RBI has promised to pump into the debt market through the targeted long term repo operations (TLTRO). Of the total amount it has already infused Rs 75,000 crore into the system.
Under the TLTRO announced on March 27, banks gets three-year funds at the repo rate of 4.40 per cent, but have to invest 50 per cent of the fund in NCDs/CPs or any other corporate debt.
According to media reports, the TLTRO window is being tapped by HDFC, PowerGrid, NHB and also Hudco.
The Reserve Bank announced the TLTRO at lower yields to be parked in the secondary market and invest in primary issues as part of its initiatives to help borrowers cope with the economic damage inflicted by the Covid-19 pandemic.
The debentures are rated AAA/Stable by both Crisil and Care Ratings, the filing said, adding the issue will hit the market on April 16 and close the next day and will have a three-year tenor with annual coupon payout.
While Axis Trustee Services is managing the issue which will be traded on the bourses upon closing, Link Intime is the registrar and HDFC Bank is the arranger to the issue.
For the quarter to December 2019, RIL's consolidated turnover stood at Rs 1,68,858 crore and net profit at Rs 11,640 crore.
The RIL counter closed at Rs 1,189.25 down 2.5 per cent on the BSE whose benchmark Sensex closed with Rs 1.5 per cent loss on Monday.
