RBI permits RIL to keep additional $ 2 billion from lenders

Reliance Industries, the largest company in India in terms of market value, has been granted permission by the Reserve Bank of India (RBI) to retain an additional $ 2 billion on top of the $ 3 billion it had raised in the previous fiscal year through a syndicated loan facility, marking the largest such facility in years. The company sought permission from the central bank because the amount collected exceeded the limits mandated by Mint Road. Industry executives who are aware of the plans stated that Reliance intends to utilise the funds to support its working capital requirements and expand its new energy and telecom businesses. Due to Reliance's strong credit rating and cash flows, banks worldwide expressed interest in participating in the loan exercise in March. The significant demand for the loan after two rounds of syndication resulted in surplus funds available for banks to offer, prompting the company to retain more than originally intended. This is not the first time Reliance has sought special permission from the RBI. At least 10 additional lenders would join the third phase of syndication for $ 3 billion loans to Reliance and Reliance Jio Infocomm. Describing this as one of the most coveted credit deals in recent times in India, the loan syndication was successfully concluded at the end of March, with the participation of over three dozen banks. The company approached the RBI to retain the additional $ 2 billion in addition to the $ 3 billion it aimed to raise in the previous fiscal year. Approvals for such cases are granted on an individual basis, as the company needs to present a strong business case to justify raising such a substantial amount of funds. The approvals were granted earlier this month, following which the company will draw down the extra amount later this month. Also read: Anil Agarwal: Vedanta to invest $1.7B in FY24 for growth projects Report: PE/VC Investment in India Declines 44% to $3.5 bn