Reliance Jio is raising $750 million (approximately Rs 5,700 crore) via an offshore syndicated loan for funding the capex requirements, which will come for 5G. Multiple banks, including the State Bank of India, Bank of America, Credit Agricole, HSBC, along with three Japanese banks - MUFG, SMBC, and Mizuho might be syndicating the five-year offshore loan. According to the ET Telecom report, the loan agreement between the banks and Reliance Jio might be signed this week itself. It is worth noting that back in January, Jio had raised about Rs 8,000 crore by selling corporate bonds in local money markets. The telco had used this money to clear out the past spectrum-related dues pertaining to the 2014 and 2015 auctions.
Jio May Use the Money for Refinancing Short-Term Bridge Loans
The publication’s report said that Jio might use some proceeds from the fundraise for refinancing the short-term bridge loans, which were raised through commercial papers. Further, a part of the proceeds might also go towards the capex needs of 5G in urban cities. Reliance Jio is expected to be the biggest purchaser in the spectrum auctions expected to happen this summer for 5G airwaves. All of this money is only going to help the telco sit more comfortably and grow its network services in the country. Every telco is eyeing the spectrum auctions and keeping its cash reserves ready. Along with that, the telcos have been upgrading their networks to support 5G across the country. Initially, only select cities are expected to get live commercial 5G networks. Right now, everything depends on the Telecom Regulatory Authority of India (TRAI) for coming out with recommendations for spectrum auctions that are suitable for the telecom operators. If that doesn’t happen, the telcos might not participate in the spectrum auctions very enthusiastically. TRAI is expected to submit the recommendations by March-end or early April 2022.
