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Reliance Jio secures $2 bn loan for 5G Expansion from HSBC
ECONOMY & POLICY

Reliance Jio secures $2 bn loan for 5G Expansion from HSBC

Reliance Jio Infocomm has successfully secured a significant offshore loan amounting to Rs 16,640 crore ($2 billion) for the financial year 2023-24 (FY24). This move stands as one of the largest offshore loans in the country. The primary purpose of this funding is to facilitate the procurement of telecommunication equipment from the renowned Finnish company, Nokia. The loan arrangement has been orchestrated by HSBC, which acts as the lead arranger for this substantial financial transaction.

According to the report, Finnvera, the Finnish credit agency, has extended coverage for a similar amount to insure Nokia. This strategic coverage is anticipated to lower Jio's funding costs for acquiring 5G equipment.

Sources familiar with the matter revealed that the deal was recently finalised after several months of discussions with HSBC as the lead arranger. The loan amount hovers around $1.5-2 billion and is structured in a manner that includes an implied rate of interest over the loan's tenure.

It's noteworthy that in September, Jio had also secured nearly $2 billion from BNP Paribas, primarily earmarked for financing the purchase of 5G equipment from Ericsson.

In their annual report, Jio disclosed a collaboration with the Swedish credit agency EKN, through which they obtained funding amounting to $2.2 billion. These funds are specifically allocated for procuring equipment and services essential for their ambitious 5G plan.

Additionally, recent data released by the Telecom Regulatory Authority of India (Trai) showcased Jio's robust growth in user numbers. In July, Jio welcomed 3.9 million new mobile users, a significant increase compared to Airtel's addition of 1.5 million users during the same period.

Jio's momentum continued as they added 2.2 million users in June. Furthermore, the company achieved a milestone in July by surpassing 10 million landline connections, up from 9.95 million the previous month. Notably, Jio currently dominates one-third of India's extensive 30.6-million-strong landline market, providing services to a significant portion of the country's population.

For the month of July, Jio boasted a substantial subscriber market share of 38.6%, while Airtel held a respectable 32.7% share, solidifying Jio's position as a major player in India's competitive telecommunication landscape.

Reliance Jio Infocomm has successfully secured a significant offshore loan amounting to Rs 16,640 crore ($2 billion) for the financial year 2023-24 (FY24). This move stands as one of the largest offshore loans in the country. The primary purpose of this funding is to facilitate the procurement of telecommunication equipment from the renowned Finnish company, Nokia. The loan arrangement has been orchestrated by HSBC, which acts as the lead arranger for this substantial financial transaction. According to the report, Finnvera, the Finnish credit agency, has extended coverage for a similar amount to insure Nokia. This strategic coverage is anticipated to lower Jio's funding costs for acquiring 5G equipment. Sources familiar with the matter revealed that the deal was recently finalised after several months of discussions with HSBC as the lead arranger. The loan amount hovers around $1.5-2 billion and is structured in a manner that includes an implied rate of interest over the loan's tenure. It's noteworthy that in September, Jio had also secured nearly $2 billion from BNP Paribas, primarily earmarked for financing the purchase of 5G equipment from Ericsson. In their annual report, Jio disclosed a collaboration with the Swedish credit agency EKN, through which they obtained funding amounting to $2.2 billion. These funds are specifically allocated for procuring equipment and services essential for their ambitious 5G plan. Additionally, recent data released by the Telecom Regulatory Authority of India (Trai) showcased Jio's robust growth in user numbers. In July, Jio welcomed 3.9 million new mobile users, a significant increase compared to Airtel's addition of 1.5 million users during the same period. Jio's momentum continued as they added 2.2 million users in June. Furthermore, the company achieved a milestone in July by surpassing 10 million landline connections, up from 9.95 million the previous month. Notably, Jio currently dominates one-third of India's extensive 30.6-million-strong landline market, providing services to a significant portion of the country's population. For the month of July, Jio boasted a substantial subscriber market share of 38.6%, while Airtel held a respectable 32.7% share, solidifying Jio's position as a major player in India's competitive telecommunication landscape.

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