Reliance Info to raise Rs 5,000 crore

One of the largest fund-raising exercise in recent times by any telecom firm.

Reliance Infocomm, the new economy arm of the Reliance group, is raising Rs 5,000 crore from a consortium of banks through a eight-year facility, with a three-year moratorium on repayment.

The exact quantum of interest rate is not known but sources said the loan is finely priced. It could probably be lower than the Reserve Bank's bank rate which is pegged at 6 per cent now.

This is one of the largest fund raising exercise in the recent times by any telecom company. A clutch of banks including State Bank of India, Allahabad Bank, ICICI, IDBI Bank, Bank of India, Corporation Bank and Union Bank of India have decided to participate in this loan syndication.

When contacted, Reliance Infocomm spokesperson declined comment.

However, sources say that the banks have agreed to extend the line of credit depending on Reliance Infocomm's investment plans. In fact, they claim that "the amount can exceed Rs 5,000 crore as and when it (Reliance Infocomm) actually draws the amount from the consortium".

Reliance Infocomm has already invested Rs 18,000 crore to lay over 60,000 km terabit capacity optic fibre network covering over 600 cities.

The company is expected to utilise funds to expand its optic fibre network which will eventually cover 116,000 km to connect 2,500 towns and cities of the country.