Mukesh Ambani-owned Reliance Group has just raised $2.4B
What's the story
Billionaire Mukesh Ambani's Reliance Group has raised $2.4 billion via asset-backed securities, sources familiar with the matter told Bloomberg. The deal is one of India's largest this year and was highly sought after by top asset managers such as Aditya Birla Sun Life and HDFC Asset Management. The issuance was done via pass-through certificates with different maturities and an average coupon of 7.75%.
Market response
Securities issued by 3 trusts
The securities were issued by three trusts, Radhakrishna Securitisation Trust, Shivshakti Securitisation Trust, and Siddhivinayak Securitisation Trust. They have maturities of around three, four, and five years respectively. About 75% of the issuance was bought by asset managers including Aditya Birla Sun Life Asset Management, HDFC Asset Management, ICICI Prudential Asset Management, Nippon Life India Asset Management, and SBI Funds Management.
Market impact
Deal boosts India's securitization market
The Reliance offering was well-received as it gave investors an opportunity to invest in top-rated asset-backed securities in a market dominated by non-bank financial firms. The deal also bolsters India's securitization market, which is relatively small but expected to hit a record high of over ₹2.5 trillion in issuance this fiscal year ending March, according to ICRA.
Transaction details
Strong demand allows Reliance to increase transaction size
The strong demand for the securities allowed Reliance to increase the transaction size from an initially planned ₹180 billion to ₹210 billion. The deal was arranged by Barclays Plc and backed by loan receivables from Digital Fibre Infrastructure Trust, an investment infrastructure trust set up by Reliance Industrial Investments and Holdings.