SBI Buys 40%of Reliance’s Rs 13,000 Crore Bond Issue

State Bank of India (SBI) has emerged as the largest buyer in Reliance Industries Ltd’s latest Rs 13,000 crore domestic bond issuance, purchasing bonds worth nearly Rs 5,000 crore, or about 40 per cent of the total offering.

The 10-year issue carries an annual coupon of 7.90 per cent and comes just weeks after Reliance raised another Rs 12,000 crore through shorter-tenure bonds, highlighting the company’s accelerated use of India’s domestic debt market.

Reliance completed the Rs 13,000 crore, or roughly USD 1.35 billion, bond issuance on September 30. SBI accounted for close to Rs 5,000 crore of the issue, making it the largest single participant. The bonds have received the highest domestic credit rating of AAA and carry a fixed annual coupon of 7.90 per cent. The 10-year maturity indicates strong institutional demand for high-quality corporate debt even as bond yields have risen sharply.

The issue size was Rs 13,000 crore, with a 10-year tenure and a 7.90 per cent annual coupon. SBI purchased approximately Rs 5,000 crore, representing around 40 per cent of the issue. The bonds carry an AAA credit rating.

Reliance had returned to the domestic rupee bond market earlier in September after remaining away since November 2023.

The latest transaction follows a Rs 12,000 crore five-year bond sale completed about two weeks earlier at an annual coupon of 7.47 per cent. Taken together, the two issuances have enabled Reliance to raise around Rs 25,000 crore from India’s bond market within a short period.

The 10-year paper carries a higher coupon than the five-year issue, reflecting the additional duration risk as well as the sharp rise in market interest rates.

Reliance had also raised Rs 20,000 crore through bonds in November 2023, which was the largest domestic rupee bond issuance by an Indian non-financial company at the time.

The renewed borrowing activity comes as several large Indian companies seek to lock in funding before any further tightening in domestic monetary conditions. Around Rs 29,000 crore of corporate bond offerings were being prepared for the market in late September amid expectations that elevated oil prices and inflation could influence future RBI policy decisions.

The debt issuance comes against the backdrop of Reliance’s large and diversified balance sheet spanning energy, retail, digital services and new-energy investments. For Q1FY27, Reliance reported gross revenue of Rs 3,40,257 crore, EBITDA of Rs 54,067 crore, PAT of Rs 23,196 crore and capital expenditure of Rs 38,682 crore.

For FY26, the company reported gross revenue of Rs 11,75,919 crore, EBITDA of Rs 2,07,911 crore and PAT of Rs 95,754 crore. Its FY26 capital expenditure stood at Rs 1,44,271 crore.

Reliance’s large investment requirements across telecom, retail, energy and new businesses mean debt markets remain an important source of long-term capital alongside internal cash generation.

The timing of the bond sale is significant. India’s benchmark 10-year government bond yield recently moved above 7.1 per cent, while U.S. Treasury yields have also risen sharply. Higher crude oil prices have increased inflation concerns and strengthened expectations of tighter monetary conditions.

Against this backdrop, companies have been moving quickly to secure borrowing costs before rates potentially rise further. For SBI, the nearly Rs 5,000 crore investment adds a large AAA-rated, long-duration corporate asset to its portfolio. For Reliance, the Rs 13,000 crore issue further diversifies funding and extends its debt maturity profile.

The strong absorption of the issue also shows that institutional demand for highly rated corporate debt remains firm despite the recent rise in bond yields.

Disclaimer: The article is for informational purposes only and not investment advice.