RIL Fund Raise Through NCDs: Board to Consider Plan at April 25 Meet

Published on April 18, 2025

In a significant financial development, Reliance Industries Limited (RIL) has announced plans for a domestic fund raise through NCDs (Non-Convertible Debentures). The conglomerate disclosed this strategic financial move through an exchange filing on Thursday. The RIL fund raise through NCDs represents a continuation of the company’s approach to leverage debt securities for capital acquisition, following its substantial debenture issuance in 2023.

RIL Fund Raise Announcement Details

The RIL fund raise through NCDs announcement came as part of a broader communication regarding the upcoming board meeting scheduled for April 25. While confirming the plans to raise funds via debt securities in the domestic market, the company has not specified the quantum of capital it intends to mobilize through this issuance. The decision to pursue this funding approach highlights Reliance’s strategic approach to capital management during the current economic climate.

Non-Convertible Debentures represent a form of debt instrument that cannot be converted into equity shares of the issuing company. For a corporate giant like RIL, NCDs offer a structured way to raise substantial capital without diluting ownership, making them an attractive financing option for specific strategic initiatives and general corporate purposes.

April 25 Board Meeting Agenda

The RIL fund raise through NCDs will be considered alongside other critical business items during the April 25 board meeting. Primary among these is the review and approval of Reliance Industries’ financial results for the March quarter (Q4) and the entire 2024-25 fiscal year. This dual focus—on both retrospective financial performance and prospective fundraising—underscores how Reliance’s leadership integrates performance assessment with forward financial planning.

The timing of this announcement is particularly noteworthy, coming just before the financial year’s closing board meeting. This suggests strategic alignment between the company’s fiscal year performance analysis and its upcoming capital requirements. Investors and market analysts will be closely monitoring both aspects of the April 25 meeting outcomes.

“The meeting of the Board of Directors of the Company is scheduled to be held on Thursday, April 25, 2025… to consider and approve the standalone and consolidated audited financial results of the Company for the quarter and financial year ended March 31, 2025 and to consider and recommend dividend on equity shares. The Board will also consider issuance of senior unsecured notes in the form of Non-Convertible Debentures in the domestic market during the financial year 2025-26.” RIL Exchange Filing

Previous NCD Issuance by Reliance

This isn’t the first time Reliance has turned to the NCD route for fundraising. The last significant RIL fund raise through NCDs occurred in 2023, when the Mukesh Ambani-led conglomerate successfully raised ₹20,000 crore through domestic non-convertible debentures. Those debentures carried a coupon rate of 7.79 percent, representing the interest rate the company agreed to pay investors who purchased these debt securities.

The 2023 NCD issuance demonstrated Reliance’s ability to attract substantial capital through debt instruments, even in a competitive market environment. The coupon rate established for that issuance also serves as a potential benchmark against which the upcoming debentures might be compared, though changing market conditions and interest rate environments will likely influence the terms of any new issuance.

Market Implications of RIL’s Debt Strategy

The announcement of the RIL fund raise through NCDs carries significant implications for both the company and the broader market. For Reliance, this represents a continuation of its balanced approach to capital management, utilizing debt instruments to fund growth initiatives without immediately diluting shareholder equity. This strategy has been a hallmark of RIL’s financial management under Mukesh Ambani’s leadership.

From a market perspective, a substantial NCD issuance by a company of Reliance’s size can influence benchmark rates and investor appetite for corporate debt. Given RIL’s status as one of India’s largest companies by market capitalization, its debt issuances are closely watched as indicators of corporate financial strategy in the current economic climate.

Potential Utilization of Raised Funds

While Reliance has not specifically outlined how it plans to utilize the proceeds from the proposed RIL fund raise through NCDs, historical patterns and current business priorities provide potential insights. Reliance Industries operates across multiple sectors including petrochemicals, refining, telecommunications, retail, and digital services. Each of these verticals presents opportunities for capital deployment, whether for organic growth, technological upgrades, or strategic acquisitions.

The timing of this fundraising initiative also coincides with Reliance’s ongoing investments in green energy initiatives, 5G network expansion through Jio, and retail footprint enhancement. These strategic focus areas have been emphasized in recent communications to shareholders and could potentially benefit from additional capital infusion.

Reliance Industries’ diverse business segments across petrochemicals, digital services, retail, and green energy could potentially benefit from the upcoming RIL fund raise through NCDs. (Image: Representative)

Investor Perspective on the NCD Issuance

From an investor standpoint, the RIL fund raise through NCDs presents both opportunities and considerations. For debt investors, Reliance debentures typically offer exposure to one of India’s most financially robust corporate entities, often with attractive yields compared to government securities. The company’s diversified business portfolio and strong cash flows provide reassurance regarding its debt servicing capabilities.

For equity shareholders, the approach of using NCDs rather than equity issuance prevents immediate dilution of their holdings. However, they will be attentive to how effectively the raised capital is deployed and whether the returns on invested capital exceed the cost of the debt, thereby creating additional shareholder value over time.

As April 25 approaches, market participants will be closely monitoring developments surrounding this strategic financial move by Reliance Industries. The board meeting outcomes, including both the financial results and details of the RIL fund raise through NCDs, will provide valuable insights into the company’s current performance and future trajectory under the continued leadership of Mukesh Ambani.

Published on April 18, 2025 | Updated on April 18, 2025