Mukesh Ambani's Jio Raises Nearly 2-Billion Offshore Loan For Buying 5G Network Equipment From Nokia: Report

Reliances' telecom unit Jio Infocomm has raised close to $2 billion or Rs 16,640 crore in one of the country's biggest offshore loans in FY24. According to a report by the Economic Times, HSBC acted as the lead arranger of the transaction to help fund the telco's 5G gear purchases from Nokia. Finnish credit export agency Finnvera reportedly provided a cover of a similar sum to insure Jio's 5G gear supplier Nokia and the telecom company's global lenders from future risks.

According to the report citing people aware of the matter, the loan amount is expected to reduce Jio's overall 5G gear funding costs and it will make the lender and supplier more comfortable. The ET report quoted one of the people aware of the matter as saying, "The deal was concluded recently after talks over the past couple of months with HSBC as lead arranger... the loan quantum is around $1.5-2 billion, and it is structured in a way that carries with it an implied rate of interest arrived over the tenure of the loan."

The development comes nearly one month after Jio raised around $2 billion in offshore loans, with financial services company and lender BNP Paribas acting as the lead arranger of the transaction. This offshore loan would help fund the purchase of 5G network gear from Swedish networking and Swedish telecom company Ericsson.

BNP Paribas would provide $1.9-2 billion over a nine-month period during the course of which Jio will pay back Ericsson, BNP, and some other banks. The funding is through a discounted process and an implicit interest rate will be arrived at over a period of nine months during which Jio will repay in tranches. Besides, Swedish export credit agency EKN also offered a $2.2 billion cover to Jio that would cover its 5G supplier Ericsson and global lenders from future risks.

Last month, Jio, the world's largest private mobile data network, announced the launch of JioAirFiber services, its integrated end-to-end solution for home entertainment, smart home services, and high-speed broadband, across 8 metro cities.

Reliance Jio Infocomm Limited, a subsidiary of Jio Platforms Limited, has built a world-class all-IP data-strong future-proof network using 4G LTE and 5G technologies. It is the only network conceived as a Mobile Video Network from the ground up.

RIL's telecom unit posted a 12 % growth in its net profit to Rs 4,863 crore in Q1 2023 against Rs 4,335 in the corresponding period last year. The telco's revenue from operations grew 9.9% to Rs 24,042 crore in the April-June quarter, while the total income of Reliance Jio stood at Rs 24,127 crore in the same period.

Today, the share price of Reliance Industries was seen trading 0.95% lower at Rs 2324.10 per share at 11:33 am IST.