Reliance May Secure India's Biggest Loan Since 2023, Will It Refinance $2.9 Billion Debt?

Billionaire Mukesh Ambani-owned Reliance Industries is likely to borrow around $3 billion from banks, according to a Bloomberg report. Currently, the company is in discussions with over half a dozen of financial institutions to secure the loan. If finalised, this could mark the largest offshore borrowing from India in over a year.

Terms for the facility, which will refinance debt due next year, have not been finalized yet and could be subject to changes, said people familiar with the matter. Reliance has approximately $2.9 billion worth of debt due in 2025, including interest payments.

The borrowing would signal Reliance’s return to the offshore loan market since 2023, when the conglomerate secured more than $8 billion in financing --- a record for any Indian borrower at the time. These facilities attracted participation from nearly 55 lenders to join deals of top-tier credits, the report said.

This loan comes amid continued weakening of the Indian rupee, which hit a record low against the dollar last month due to ongoing outflows from local entities.

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It is pertinent to note that Reliance Industries is rated one notch above India’s sovereign grade, representing a rare instance of when a company’s creditworthiness is higher than the country’s it is based in it.

Moody’s Ratings reaffirmed Reliance Industries’ rating at Baa2 last week, as the company’s credit metrics are “solidly positioned” and “are likely to remain so despite high ongoing capital spending”.

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"The affirmation of RIL's Baa2 ratings reflects the company's large scale and leading market position across its diverse businesses as well as management's strong execution track record," the global rating agency said.

Reliance Industries' strong financial position and diversified business model make it one of the most reliable borrowers in India. Its businesses span energy, retail, telecommunications, and technology which contribute to its resilience and ability to secure large-scale funding.