Reliance goes ahead with ₹12,000 crore bond issue amid rising borrowing costs

Mumbai: Reliance Industries is going ahead with its ₹12,000-crore, 10-year bond issue on Wednesday, even as state-owned Sagarmala Finance scrapped its ₹600 crore bond sale amid low participation and higher-than-expected borrowing costs.

This was Sagarmala Finance's first bond issue. The company was seeking to borrow at a rate below 8% for the 10-year paper, but received bids at 8.3%-8.4%, prompting it to scrap the issue.

Also Read: Reliance to raise Rs 10,000 crore next week as companies rush to tap surplus bank liquidity


Sagarmala is India's first dedicated maritime non-banking financial company under the ministry of ports, shipping and waterways.

In contrast, Reliance's ₹12,000-crore bond issue carries a 7.9% coupon, which is 74 basis points above the 10-year benchmark government bond yield of 7.16%.

Adani Airports, too, raised ₹1,000 crore at a rate of 8.96% for three years on Tuesday. ET had reported in its September 25 edition that Adani Airports and Reliance Industries were in the market looking to raise bonds.

Also Read: Reliance Industries to raise Rs 12,500 crore via five-year bonds

Last week, state-run Sidbi also withdrew its ₹6,000-crore bond auction due to higher-than-expected rates. Sidbi was receiving bids at around 8.03%, above its targeted borrowing cost of 7.80%-7.90%, corporate bond participants said.