Reliance Industries, the country’s biggest company by market value, has received the Reserve Bank of India’s (RBI) permission to retain $2 billion over and above the $3 billion it had raised last fiscal in what was called the largest syndicated loan facility in years, to expand operations.
RIL had sought RBI’s permission to retain the amount ($2 billion) as it was collected above the limits mandated by Mint Road, sources quoted in a report in ET stated. RIL is planning to use the money to fund working capital needs and utilize it to expand its new energy and telecom businesses.
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"Given Reliance's strong credit rating and cash flows, banks across the globe wanted to participate in the loan exercise back in March. The strong demand for the loan after two rounds of syndication meant that there was still money on the table banks were willing to offer; so, the company decided to retain more than it needed," said sources quoted in the report.
"This is not the first time RBI has given permission for such an increase. Reliance itself has sought special permission from the RBI before," the official added.
RIL’s deal was billed as one of the most sought-after credit deals in India in recent times. With more than three dozen banks participating, the loan syndication was completed at the end of March.
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Earlier it was reported that at least 10 more lenders will join the third leg of the syndication of $3 billion loans to Reliance and Reliance Jio Infocomm.
As per the RBI’s rules, an individual company can avail up to $750 million per fiscal year. Beyond this limit, companies need to take special permission from the central bank to raise money abroad.
