Reliance Eyes $3 Billion Loan Amid Debt Refinancing Plans

Reliance Industries, led by billionaire Mukesh Ambani, is negotiating with several banks to secure a loan of up to $3 billion. According to sources familiar with the matter, this loan is intended to refinance debt due in 2025. About 6 banks are reportedly involved in the discussions, and the loan will likely be syndicated to a broader market by the first quarter of 2025. The final terms of the agreement are yet to be determined, and the plan could evolve.

Debt Details and Offshore Borrowing History

The company has about $2.9 billion in debt, including interest, due next year. If the deal proceeds, it would mark Reliance’s return to international borrowing after a hiatus since 2023. Previously, Reliance raised over $8 billion in loans, attracting around 55 lenders eager to participate in the high-profile deals involving the company and its subsidiary, Reliance Jio Infocomm Ltd.

Impact of Currency Weakness

This borrowing effort coincides with a weakening Indian rupee, which recently hit a record low against the US dollar. The rupee’s decline is attributed to continuous outflows from Indian equity markets, adding to economic pressure.

Strong Credit Ratings Despite High Spending

Reliance Industries is rated one notch above India’s sovereign credit rating, a rare distinction highlighting its financial strength. Moody’s recently reaffirmed the company’s Baa2 rating, noting its strong credit metrics, which remain robust despite ongoing high capital expenditures.

Reliance Industries share price is trading at ₹1,291.00 as of 9:37 AM on December 10, 2024, reflecting a drop of ₹4.15 or 0.32% today. The stock opened at ₹1,289.25 and has so far reached a high of ₹1,294.90 and a low of ₹1,286.00 during the session. With a market capitalisation of ₹17.47 lakh crore, Reliance Industries has a price-to-earnings (P/E) ratio of 25.73 and offers a dividend yield of 0.39%. Over the past 52 weeks, the stock has traded within a range of ₹1,203.15 to ₹1,608.80.

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