INSUBCONTINENT EXCLUSIVE:
Mumbai: Reliance Industries (RIL), the telecoms-to-energy conglomerate, announced raising up to Rs 25,000 crore in proposed non-convertible
bond issues, even as several of its large peers including the Tata Group, the Birla Group and L-T, and top Indian banks are busy negotiating
meeting of its board members.
The Reliance announcement comes a day before the second installment of the Reserve Bank of India's (RBI)
targeted long-term repo operations (TLTRO) scheduled Friday, when Rs 25,000 crore is set to enter the system
It is part of a Rs 1-lakh-crore TLTRO package.
Some top rated non-banking finance companies (NBFC) in the country are also in talks with
banks, multiple market sources told ET
Banks are mandated to invest half of the sum from TLTRO in primary corporate bond sales
The rest will have to be invested through secondary market transactions.
"While banks can avail cheap money via TLTRO, which they should
invest in corporate bonds, in turn, issuers too can tap the market at least 50 basis points lower than prevalent primary market rates," said
Ajay Manglunia, managing director and head of fixed income at JM Financial
"Such proposed deals, if sealed, should be beneficial for both parties."
Top-rated state companies, including Rural Electrification Corp,
Power Finance Corp, Indian Railways Fin Corp, and National Highway Authority of India, are expected to use this opportunity
REC is likely to raise Rs 2,500 crore next Tuesday
These companies could not be contacted immediately.
The spread or differential between the benchmark bond and top-rated corporate papers has
narrowed to 80-90 basis points after the latest central bank policy, compared with 150-200 basis points before the bi-monthly policy
scheduled in April but advanced to last Friday.
"Bond market activities should start now," said Umesh Revankar, managing director at Shriram
"We expect banks to proactively subscribe to investment grade papers of NBFCs, paving way for future fund raising."