Reliance Jio is planning to raise Rs 2,000 crore soon from the bond market. The move comes after the Reserve Bank of India raised the policy rate for the first time in more than four years last week. Also Read - Reliance Jio: How to set caller tune on your smartphoneAlso Read - Jio likely to launch affordable Android phones in India by Dec 2020: Report
According to Economic Times, the bond would have a tenure of three years and will be sold on the exchange with a coupon of 8.7 percent. “The company will receive subscriptions whoever bids at 8.7 per cent. It would be up for bidding on Thursday,” said one of the sources cited above. Also Read - Vodafone Idea now rebranded as Vi in India to take on Jio and Airtel
The report adds that a state-owned bank might buy the entire quantum of the subscription because of the triple A rating and the proceeds is said to be used for the expansion of its telecom service. Reliance Jio has garnered over 186 million subscribers since starting commercial service in September 2016. The Mukesh Ambani-led company has been on a fund raising spree to support the expansion of the business.
The telecom company recently raised $500 million through a syndicated Samurai loan from three Japanese banks including Bank of Tokyo-Mitsubishi UFJ (MUFJ), Sumitomo Mitsui Banking Corporation (SMBC) and Mizuho Bank. The loan came with a floating-rate loan for a period of seven years.
Reliance Industries, the parent company of Reliance Jio, has sought approval from shareholders to raise up to Rs 20,000 crore through a non-convertible debenture (NCD) issue in 2018-19. The new fund-raising effort could be used to scale telecom business and help in roll out of its FTTH service. Reliance Jio is rumored to introduce low-cost laptop with 4G connectivity as it tries to add more subscribers to its 4G-only network.
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Reliance Jio’s subscriber addition started on a strong note when it commenced service in 2016 but the growth seems to have slowed down. Its incumbent rivals have tried to rival Jio’s offerings which has not helped to court customers away from players like Airtel or Vodafone.