RIL, Adani Gear Up For Overseas Debt Despite Weak Re
Reliance Ind mandates 11 banks for $3-bn loan, while Gautam Adani-led group plans to raise $500 mn by Feb
RIL, Adani Gear Up For Overseas Debt Despite Weak Re
The decision on new loan comes amid continued weakening of the Indian rupee, which hit a record low against the dollar last month, due to ongoing FII outflows from local equities
Mumbai: Large Indian corporates such Reliance Industries (RIL) and Adani Group are seeking to raise foreign currency debt early next year as the India’s fastest growing economy is set to attain higher milestones, offering investment opportunities.Reliance Industries has given mandates to 11 banks for upto $3-billion loan. Talking to Bizz Buzz, MV Hariharan, ex-treasury head, State Bank of India (SBI), says: “The interest rate arbitrage! On more favourable tenors.Moreover, there could also be investment decisions in those countries apart from having a better funded war-chest for leveraging the first mover advantage”.
Ofcourse, the Indian rupee’s depreciation trajectory is worrisome, but these conglomerates would possibly claim the availability of natural hedges, he said.
The ports-to-power conglomerate Adani Group may revive Adani Green’s dollar bond. To be precise, Adani Green Energy plans to revive its scrapped dollar bond sale between April and June. The company aims to raise $500 million by February through banks or a private placement in the offshore market.
Other Adani Group firms may raise funds through public bond sales in India over the next 12 months. The conglomerate has been touting its large cash pile- $6.3 billion- to take care of all its requirements. The new loan comes amid continued weakening of the Indian rupee, which hit a record low against the dollar last month, due to ongoing FII outflows from local equities.
Coming to Reliance Industries, it seeks to raise upto $3 billion which could be the biggest overseas loan in the recent past. The proceeds from funds thus raised will be used by the group to refinance its debt due next year. About half a dozen banks are in discussions with the borrower.
The loanwould be syndicated to the wider market in Q1, though the terms are yet to be finalised. If successful, it would be Reliance Industries’ return to the offshore market since 2023, when it raised over $8 billion in loans, a record for an Indian borrower then.
Terms for the new loan facility have not been finalised yet and could be subject to changes, sources said.
