Reliance Jio to raise Rs 5,000 cr via debentures

4G telephony services to be rolled out in first half of FY17

Reliance Jio Infocomm Ltd (RJIL), telecom venture of Mukesh Ambani-controlled Reliance Industries, plans to raise upto Rs 5,000 crore through debentures to fund business operations.

RJIL has large holding of pan-India liberalised spectrum, and the unified license. This makes it the only player that can offer voice telephony along with high-speed data on fourth generation (4G) technology across all 22 circles in the country.

RJIL is expected to roll out its services in the first half of 2016-17 (refers to financial year, April 1 to March 31).

Rating agency CRISIL has assigned "AAA" rating for non-convertible debentures (NCDs). RJIL will remain strategically important to RIL, which will continue to provide strong management and financial support to the subsidiary.

RJIL is RIL's vehicle for entry into the Indian telecom services market. The parent has invested Rs 30,000 crore in RJIL in the form of equity as on December 31, 2015.

CRISIL said ratings factor in the potential benefits that RJIL can reap due to its large liberalised spectrum holding of 751 MHz (including both uplink and downlink) and technological advancements in the long-term evolution (LTE) technology, CRISIL said.

These rating strengths are partially offset by RJIL's exposure to implementation and technology risks pertaining to the roll-out of the telecommunications (telecom) services. RJIL will also face intense competition from well-entrenched players in the Indian telecom space.

The Indian telecom space has well-entrenched players such as Bharti Airtel, Vodafone India Ltd, and Idea Cellular Ltd. These players command a sizeable revenue market share and have been in operations for more than a decade, rating agency said.