Reliance Industries Raises $2.86 Billion Foreign Currency Loan

According to a Bloomberg report, Reliance Industries has raised $2.862 billion in loan from a syndicate of global banks. $2.4 billion of this loan will be denominated in US dollars. The remaining $ 462 million amount will be denominated in Japanese Yen (approximately 67.7 billion Yen). The syndicate from which these loans have been raised include around 55 banks.

Data source: Bloomberg

Reliance Industries’ Credit Rating Is Better Than India’s Sovereign Credit Rating

Reliance Industries’ credit rating for foreign currency loans is Baa2 from Moody’s. Fitch has assigned it a credit rating of BBB. Usually, companies’ credit ratings have a cap of the sovereign credit rating of the country where they are based. But Reliance’s credit rating is better than the sovereign credit rating of India. Sovereign credit rating of Indian currently is Baa3 from Moody’s. B grade credit ratings fall in the investment grade category.

Purpose For Which The Loan Will Be Used

It is not clear for what purpose Reliance Industries will use this loan amount. Some of this may go to retiring existing debt and some for making investments. The company has been on an investment spree for the past few years as it enters or expands into new business categories. Reliance Industries runs the Jamnagar oil refinery. It is the biggest oil refinery, currently, in the world. In the past few years, Reliance Industries has invested heavily in the telecom business, retail business and financial services business. It is now targeting to enter in a big way in deep technology and advanced manufacturing businesses.

At 1:28 p.m. India time, Reliance Industries’ stock price was up by 0.90% at Rs 1,437.20. 52-week high price of the company currently is Rs 1,608.80. At this time, Nifty 50 index was up by 0.99% or 243.65 points.

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Source: Bloomberg