Reliance Jio Aims To Raise Rs 12,000 Crore By Mid-November For 5G Capex; In Discussions With Global Lenders
October 17, 2022: RIL is also in talks with offshore lenders for a $2.5 billion (Rs 20,600 crore) offshore syndicated loan and the latest funding for Jio adds to that.
The amount will be used to purchase 5G network equipment from Sweden’s Ericsson and Finland’s Nokia. Jio plans to roll out 5G service in India by December 2023.
New Delhi – After announcing its plans to roll out 5G service across the country by December 2023, Reliance Jio Infocomm is looking to raise an additional $1.5 billion (Rs 12,300 crore) through external business loans (ECBs).
The money will be used to fund Jio’s 5G capex, according to three people familiar with the development.
The Mukesh Ambani-led telecommunications company has approached foreign banks, including BNP Paribas, HSBC and MUFG Bank, for the same.
The country’s main telecommunications company plans to generate five-year money through the ECB route, and the Reserve Bank of India relaxed rules a few months ago.
Ambani-owned Reliance Industries (RIL) is also in talks with offshore lenders for a $2.5 billion (Rs 20.6 crore) offshore syndicated loan and the latest financing for Jio adds to that, they said. people to Economic Times.
This will be used for purchases of 5G network equipment from Sweden’s Ericsson and Finland’s Nokia.
The $1.5 billion foreign loan may be priced after adding 150-165 basis points above the Secured Overnight Financing Rate (SOFR), a global rate indicator that recently replaced the London Interbank Offered Rate (LIBOR). , according to the sources.
“The company has called individual banks to propose fundraising as it aims to raise the money by mid-November,” one of the people quoted above said.
Bank of America, Credit Agricole, DBS Bank and Société Générale are, among others, in talks with the company about the ECB.
It should be mentioned here that the RBI had in July doubled the limit on fundraising through the ECBs to $1.5 billion under the automatic route.
This was done in the expectation that inflows of foreign funds could cushion the rupee’s decline against the dollar. The relaxation in regulations is effective until the end of calendar 2022.
Meanwhile, the discussion about both loans (for RIL and Jio) continues “simultaneously” and the $2.5 billion loan has a tentative term of five years. It is expected to be priced after adding 130-150 basis points over SOFR, one of the people said.
Jio, on the other hand, is investing Rs 2 lakh crore (including spectrum costs) to set up its pan-India 5G network.
In the auction that concluded in August, it spent Rs 88,078 crore on 5G radio waves. The telecommunications company started its 5G beta services in four cities earlier this month.
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