Reliance Jio raises Rs 16,640 crore via offshore loans from HSBC, others

Reliance Jio Infocomm has raised Rs 16,640 crore ($2 billion) in one of the country’s largest offshore loans for the financial year 2023-24 (FY24), as reported by The Economic Times (ET) on Tuesday. The funds will be primarily used to finance the telecommunication company’s equipment purchases from the Finnish giant Nokia. HSBC serves as the lead arranger for the loans.

The ET report also noted that the Finnish credit agency Finnvera has provided cover for a similar sum to insure Nokia. This cover is likely to reduce Jio’s 5G equipment funding costs.

“The deal was concluded recently after discussions over the past couple of months with HSBC as the lead arranger. The loan quantum is around $1.5-2 billion and is structured in a manner that carries with it an implied rate of interest over the tenure of the loan,” a person with direct knowledge of the matter was quoted as saying by ET.

Earlier in September, Jio also raised nearly $2 billion from BNP Paribas. These funds were primarily secured to finance the purchase of 5G equipment from Ericsson.

In its annual report, Jio announced that it has collaborated with the Swedish credit agency EKN to secure $2.2 billion in funding. These funds will finance the equipment and services for its 5G plan.

According to data released by the Telecom Regulatory Authority of India (Trai), Jio added 3.9 million mobile users in July, compared to Airtel’s addition of 1.5 million users.

Jio has consistently posted robust growth in user numbers, adding 2.2 million users in June. The company also surpassed the 10 million mark for landline connections in July, up from 9.95 million in the previous month. Presently, one out of every three connections in India’s 30.6-million-strong landline market is serviced by Jio.

For the month of July, Jio’s subscriber market share was 38.6 per cent, while Airtel held a 32.7 per cent share.