Reliance Industries raises Rs 20,000 crore through 10-year bonds at 7.79%

Reliance Industries raised Rs 20,000 crore on Thursday through 10-year bonds at a coupon of 7.79 per cent, which was along expected lines, market participants said. It was the largest bond issue by a non-financial Indian firm.

The majority of the subscribers were large insurance companies, and pension funds, market participants said.

Market participants said that the company received bids worth around Rs 27,000 crore ranging between 7.35 per cent and 7.79 per cent. At 7.80 per cent, Rs 10,000 crore worth of bids were received, they said.

“Reliance Bonds got a fantastic response; the coupon was in line with expectations," said Ajay Manglunia, managing director and head of the investment grade group at JM Financial. "Those who wanted 7.80 per cent and missed it were looking in the market (secondary market) to buy, and the bond was trading at 7.75 per cent later,” he added.

Market participants said that the market sentiment might improve after the issuance. Fundraising through corporate bonds had fallen by 40 per cent in October due to rising cost of borrowing through these instruments. Investors refrained from placing large bets in the corporate bond market due to uncertainty.

“Long-term investors have a lot of funds to deploy, but there aren’t many issuances due to rising yield. The sentiment might improve after this particular issuance,” a dealer at a state-owned bank said.

Before the particular issuance, HDFC had raised Rs 25000 crore in February before its merger with HDFC Bank through 10-year bonds at a coupon of 7.97 per cent, marking it as the largest bond issuance by an Indian company.

The market expects around Rs 50,000-60,000 crore worth of issuances in the month of November.