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Business News›News›Company›Corporate Trends›Reliance goes ahead with ₹12,000 crore bond issue amid rising borrowing costs

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Reliance goes ahead with ₹12,000 crore bond issue amid rising borrowing costs
Synopsis

Reliance Industries is moving forward with its bond issue of ₹12,000 crore, offering a 7.9% coupon rate. In contrast, Sagarmala Finance canceled its bond sale after receiving bids above its targeted interest rate. Adani Airports previously raised ₹1,000 crore at a rate of 8.96% for three years. Several companies, including Sidbi, have withdrawn bond auctions due to unexpected higher borrowing costs.

Agencies

Mumbai: Reliance Industries is going ahead with its ₹12,000-crore, 10-year bond issue on Wednesday, even as state-owned Sagarmala Finance scrapped its ₹600 crore bond sale amid low participation and higher-than-expected borrowing costs.



This was Sagarmala Finance's first bond issue. The company was seeking to borrow at a rate below 8% for the 10-year paper, but received bids at 8.3%-8.4%, prompting it to scrap the issue.



Also Read: Reliance to raise Rs 10,000 crore next week as companies rush to tap surplus bank liquidity

Sagarmala is India's first dedicated maritime non-banking financial company under the ministry of ports, shipping and waterways.

ET Bureau

The rate gap

In contrast, Reliance's ₹12,000-crore bond issue carries a 7.9% coupon, which is 74 basis points above the 10-year benchmark government bond yield of 7.16%.




Adani Airports, too, raised ₹1,000 crore at a rate of 8.96% for three years on Tuesday. ET had reported in its September 25 edition that Adani Airports and Reliance Industries were in the market looking to raise bonds.

Also Read: Reliance Industries to raise Rs 12,500 crore via five-year bonds



Last week, state-run Sidbi also withdrew its ₹6,000-crore bond auction due to higher-than-expected rates. Sidbi was receiving bids at around 8.03%, above its targeted borrowing cost of 7.80%-7.90%, corporate bond participants said.

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