India's largest company seeks $3 billion loan to refinance debt
What's the story
Billionaire Mukesh Ambani's Reliance Industries, India's largest company by market capitalization, is said to be in talks with a number of banks for a $3 billion loan. If the borrowing goes through, it would be the biggest offshore loan by an Indian firm since 2023. The loan would primarily be used to refinance debt due next year, Bloomberg reported citing sources familiar with the matter.
Syndication plan
Loan discussions involve multiple banks
The loan talks include some half a dozen banks. The idea is to syndicate this loan to a wider market in the first quarter of 2025. However, the terms for this facility are yet to be finalized and could change. Reliance Industries has an estimated $2.9 billion worth of debt due in 2025, including interest payments according to data compiled by Bloomberg.
Market reentry
Reliance Industries's return to offshore market
If approved, the loan would see Reliance Industries reenter the offshore market since 2023. That year, the conglomerate raised over $8 billion in loans, a record for an Indian borrower at the time. The facilities were for both the parent and its subsidiary Reliance Jio Infocomm Ltd., drawing around 55 lenders in total as banks looked to participate in deals with top-tier credits.
Currency impact
Loan negotiations amid weakening Indian rupee
The loan talks come amid a weakening Indian rupee, which hit a record low against the dollar last month amid continued outflows from local equities. Reliance Industries's credit rating currently sits one notch above India's sovereign grade. This is a rare case where a company's creditworthiness exceeds that of the country it operates in.