Reliance Industries plans to raise Rs 25,000 cr to fund Jio expansion plans, service debt

Country's largest conglomerate Reliance Industries plans to raise Rs 25,000 crore through privately placed debentures in order to rapidly expand its telecom venture Reliance Jio and replace its existing high-cost borrowings.

The Mukesh Ambani-owned firm has invested nearly Rs 2 lakh crore into its telecom venture Reliance Jio till date.

Also read: Reliance Jio vs Airtel: Who is saying what on telecom sector debts?

Reliance Jio's cheap data rates have forced telcos to cut call and data rates and introduce new schemes to protect market share.

Now, with the firm planning to raise Rs 25,000 crore via redeemable non-convertible debentures on private placement, its telecom plans are likely to get a big boost and make the market more competitive.

Also read: Reliance Jio effect: Mobile video consumption soars thanks to cheap data

Non-convertible debentures are unsecured bonds that cannot be converted to company equity or stock. Non convertible debentures usually have higher interest rates than convertible debentures.

Also read: Mukesh Ambani blinks, drops gas price challenge against govt

Reliance Industries sought shareholders' nod to issue redeemable non-convertible debentures (NCDs) on private placement. In a stock exchange notice, RIL said the company's annual general meeting will be held on July 21 to consider the fund raising.

A shareholder resolution sought nod "to offer or invite subscriptions for secured / unsecured redeemable non-convertible debentures, in one or more series / tranches, of an aggregate nominal value up to Rs 25,000 crore on private placement."

The firm sought to authorise the Board of Directors to "determine and consider proper and most beneficial to the company including, without limitation, as to when the said debentures are to be issued, the face value of debentures to be issued, the consideration for the issue, mode of payment, coupon rate, redemption period, utilisation of the issue proceeds and all matters connected."

Also the Board of Directors are sought to be authorised "to do all acts and take all such steps as may be necessary, proper or expedient" for fund raising.

Earlier, the company had raised Rs 30,000 crore in 2015-16 through a rights issue in two parts.

In January this year, the Mukesh Ambani-owned firm said it would raise another Rs 30,000 crore through a rights issue of optionally convertible preference shares to invest in Reliance Jio Infocomm, the telecom unit.