Business Standard

Reliance to mop up $1.5 bn overseas

Image

BS Reporter Mumbai
Reliance Industries is likely to raise around $1.5 billion (Rs 6,750 crore) from overseas markets for financing new projects.
 
Sources close to the development said the company would mobilise the funds to meet capital requirements for oil and gas production, setting up special economic zones and expanding its retail business.
 
When contacted, a Reliance spokesperson did not comment on the size of the proposed fund mobilisation. However, he said Reliance had convened a board meeting on February 24 to decide the instruments as well as the quantum of the fund to be mobilised.
 
The board will also review its earlier decision to raise $2 billion (Rs 9,000 crore) to finance capital expenditure in the oil and gas production. The board had passed the decision on November 4. The oil and gas business is expected to generate one-fifth revenue by 2010. Now, its share in the total business is insignificant.
 
Sources said the majority of the proposed fund would be meant for the retail business, being run by Reliance Retail. The company plans to invest Rs 25,000 crore in the retail business. This comprises equity worth Rs 10,000 crore and debt worth Rs 15,000 crore.
 
Reliance Retail is rolling out its business all over the country as well as buying existing chains. It may meet its internal target of setting up 100 stores by March.
 
Sources said with domestic interest rates going up, it made sense for the company to raise funds from the overseas markets. The high ratings of Reliance Retail's parent company Reliance Industries would help access funds at lower rates.
 
"There would be tremendous benefit in terms of interest rates if the company goes for an overseas issue," a source said.

 
 

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Feb 16 2007 | 12:00 AM IST

Explore News