2023-10-03 21:57:00
Jio Infocomm, the telecom unit of Reliance Industries, has secured approximately $2 billion in international loans, making it one of the largest foreign loans in India in fiscal 2024. The loan, arranged by HSBC, will be used to finance Jio’s purchases of 5G equipment from Nokia. Additionally, Finnish export credit agency Finnvera has reportedly provided insurance coverage for a similar amount to protect Nokia and Jio’s global lenders from future risks.
The loan is expected to reduce Jio’s overall 5G equipment financing costs and provide greater security to both the lender and the supplier. The loan amount is structured with an implicit interest rate determined over the term of the loan. The deal was finalized after months of discussions with HSBC as the lead body.
This latest development follows Jio’s recent $2 billion offshore loan, arranged by BNP Paribas, to finance the purchase of 5G network equipment from Ericsson. The loan, provided over a period of nine months, will be used to pay Ericsson, BNP Paribas and other banks involved in the transaction. The financing arrangement includes a discounted process and the interest rate will be determined over the nine months.
Jio’s ambitious 5G plans were highlighted by Chairman Mukesh Ambani during Reliance Industries’ annual general meeting in August. Ambani claimed that Jio would be able to meet the 5G demands of all corners of the country by the end of December. Jio has already achieved impressive coverage, covering 96% of census towns in just nine months and operating 85% of India’s 5G cells.
Coming to financial performance, Jio reported a 12% rise in net profit to Rs 4,863 crore in the first quarter of 2023 compared to the same period last year. Its revenue from operations rose 9.9% to Rs 24,042 crore in the April-June quarter. Jio’s average revenue per user (ARPU) also saw a slight increase to Rs 180.5 in Q1FY2024.
Fuentes: The Economic Times, Jio Infocomm
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