Reliance Industries Ltd. (RIL) intends to repay loans worth about ₹40,000 crore from the money raised through its proposed rights issue worth ₹53,125 crore. India’s biggest-ever equity fund raise.

“The company plans to use around ₹40,000 crore for repayment/ prepayment of all or a portion of certain borrowings and the remaining ₹13,000 crore for general corporate purposes,” according to the objects of the issue.

The company had issued commercial papers worth ₹16,350 crore to finance operating expenditure and short-term funding gaps.

RIL had also issued non-convertible debentures worth ₹36,213 crore for general corporate purpose, refinancing of existing borrowings and any other purpose in the ordinary course of business and capital expenditure.

“The amount utilised for general corporate purposes shall not exceed 25% of the gross proceeds. Our company proposes to repay/prepay either fully or partly any of the borrowings including combination thereof, subject to terms and conditions,” RIL said in a communique to shareholders.

RIL shareholders will be able to apply for one share in the rights issue for every 15 shares held as on May 14, at ₹1,257 each.

Of the ₹1,257 per share price, only 25% is to be paid at the time of subscription. A similar amount will be due for payment in May 2021 and the balance 50% has to be paid in November 2021, the company said in a regulatory filing.

“The rights issue committee of the board of directors, in its meeting held on May 17, 2020, has proposed the following schedule for payment of the balance amount of ₹942.75 per rights equity share — ₹314.25, i.e. 25%, in May 2021, and ₹628.50, i.e. the balance 50%, in November 2021,” it said.

The rights issue will be open for subscription on May 20 and close on June 3.

At the end of the March quarter, RIL’s net debt stood at ₹1,61,035 crore.