The net proceeds from Jio Platforms’ initial public offering will go towards the prepayment of the subsidiary’s debts

Jio Platforms, which filed a draft red herring prospectus (DRHP) on Friday, has said that the net proceeds of its proposed public issue will be used « for the prepayment, in whole or in part, of certain liabilities incurred by special subsidiary RJIL (Reliance Jio Infocomm Limited ») and for general corporate purposes.

This is Reliance Industries’ first public offering since Reliance Petroleum in 2007. Jio entered the mobile phone business in 2016 and has since grown to become the largest player. Today, its digital offering covers the entire company and the broadband space.

According to the document, RJIL has entered into various loan arrangements, including term loans in the nature of an external commercial loan (EKP). « Out of the net proceeds, it is proposed to use an aggregate of up to Rs.275,000 crore to repay in whole or in part certain borrowings availed by RJIL. RJIL may from time to time refinance some or all of these borrowings or enter into financing agreements, swaps for additional financing and may withdraw the same. India (Sebi). Jio Platforms intends to issue up to 27 million shares of face value of Rs.10 each at a price to be determined later.

« Our company believes that such an advance payment will help to reduce net debt and related management costs and to improve our net debt and net asset value, thereby improving the result of our operations and financial position. In addition, the company believes that this would improve our ability to acquire more resources in the future to finance possible business development opportunities, » the company says.

The company believes, the document states, that the gradual deleveraging of the balance sheet, further strengthened by the proposed prepayment of net proceeds, positions the company favorably for its ongoing strategic priorities, including 5G network densification and expansion, fixed broadband penetration, artificial intelligence and cloud services, enterprise digital services and international technology development opportunities while seeking to advance financial partnerships. rise. »