Mumbai: Reliance Industries is going ahead with its plan to sell Rs 12,000 crore of 10-year bonds on Wednesday, even as state-owned Sagarmala Finance Corp scrapped its Rs 600 crore bond sale amid low participation and higher-than-expected borrowing costs.

In its first bond offering, Sagarmala Finance was looking to borrow at a rate below 8% for 10 years, but received bids at 8.30-8.40%. This prompted India’s first dedicated maritime non-banking financial company under the Ministry of Ports, Shipping and Waterways to scrap the issue, market participants said.

Also Read: Reliance to raise Rs 10,000 crore next week as companies rush to tap surplus bank liquidity

Reliance’s planned issue carries a 7.90% coupon, which is 74 basis points above the 10-year benchmark government bond yield of 7.16%.

ET Bureau

The rate gap

Adani Airports on Tuesday raised Rs 1,000 crore at 8.96% for three years. ET reported on September 25 that Adani Airports and Reliance Industries were in the market looking to raise bonds.

Also Read: Reliance Industries to raise Rs 12,500 crore via five-year bonds

Last week, state-owned Small Industries Development Bank of India (Sidbi) withdrew a Rs 6,000 crore bond auction due to higher-than-expected rates. Sidbi was getting bids at around 8.03%, above its targeted borrowing cost of 7.80%-7.90%, participants in the corporate bond market said.

Update on September 30 -

Reliance successfully raised Rs 13,000 crores for 10 years at an annual coupon of 7.90%. State Bank of India lapped nearly 40% of the total amount, according to Reuters. Reliance has successfully raised Rs 25,000 crores in September, with Rs 12,000 crores in mid-september for a tenure of five years, at 7.47%. The company also plans to raise Rs 10,000 crores through asset-backed securities in October.