MUMBAI, May 10: The Rs 100 crore five-year paper of Reliance Industries Ltd (RIL), the first pure debt offering by the corporate which opened on Friday, garnered over Rs 175 crore. The issue will be closed on Monday.

The RIL non-convertible debentures, which carry a coupon of 14.5 % (payable half yearly) was largely picked up by banks, financial institutions and mutual funds. The five-year paper has a bullet maturity (redemption at par) with no call and put option offered.

Merchant banking sources have described the RIL issue is an attempt by a private sector AAA rated company to set a benchmark rate for five-year paper. ``It is a test case. At 14.5 coupon rate, the paper is finely priced considering the fact that the coupon on the five-year government paper is pegged at 12.69,'' market sources said.

The money market watchers have interpreted it as a RIL move to create an effective yield curve for corporate papers in the domestic debt market. ``There has been ad hocism in the debt market. This is a serious attempt to set a benchmark rate,'' sources said.

Market watchers feel the Rs 100 crore RIL issue is a prelude to large-scale market borrowings which the mega corporate is planning in the domestic market once it successfully creates the yield curve. Last year Tisco and L&T raised seven-year money at a high cost.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.