RIL raises Rs 2,550 cr through commercial paper issue

Mumbai: Reliance Industries on Thursday raised Rs 2,550 crore by selling five sets of commercial papers, coming back to the market with a significant offering after a few weeks and, according to market insiders, gaining in terms of funding costs.The retail-to-oil conglomerate, for example, mopped up Rs 1,250 crore for three months at 3.4 per cent. The rate is 45 basis points lower than its previous CP sale in May last week. One basis point is 0.01 percentage point.“Rates have crashed by 40-45 basis points in the past two months for a top-rated company like Reliance Industries,” said Ajay Manglunia, managing director and head of debt capital market at JM Financial.During this time, the three-month Treasury Bill, the short-term sovereign paper, yielded five basis points higher, data from Financial Benchmarks India show.“RIL now enjoys net debt free status, which in turn has added to positive investor sentiment,” Manglunia said.The mopup will help the company meet its working capital needs.The new papers will mature in October (two of them) and December this year and March and June next year.Commercial papers are short-term debt instruments with less than one-year maturities generally. On May 30, Reliance Industries had raised Rs 2,000 crore via three-month CPs, offering 3.85 per cent.

from Economic Times https://ift.tt/3giNUhi