According to the bankers, till now exposure to the Reliance group was treated as single group exposure and this was a limiting factor for the companies, which have been planning capital-intensive projects.
The two entities now want to draw separate lines of credit from the bankers pending the court approval for the demerger.
Following this, the banks will review their lending portfolios under each group which may result in a change in the rating of their assets, if necessary.
Earlier, the smaller companies under the Reliance umbrella used to tap the market or banks for funds using the guarantee of the triple- A companies of the group. The pricing of the loans used to be fine on the strength of such guarantees.
The splitting of the group exposure into two entities will help Reliance Industries, which has Reliance Petrochemicals under its umbrella.
With crude prices rising sharply, like other oil importing companies Reliance Petrochemicals too has hit exposure limits with banks, pointed out senior officials.
So far increasing the exposure limit had been difficult for the banks as they had to calculate the exposure of the whole group. This problem will now be solved and Reliance Industries will have some additional room for borrowing.
Post the demerger, flagship Reliance Industries came under the control of Mukesh Ambani. The company is involved in oil refining, petrochemicals, oil retailing and oil exploration.
In addition to Reliance Industries, Mukesh Ambani also controls Indian petrochemicals Corporation Ltd. Anil Ambani now presides over Reliance Energy, involved in power generation and distribution, Reliance Infocomm and Reliance Capital, a non-banking finance company.
The group exposure, according to the bankers, worked out to around Rs 36,000 crore (Rs 360 billion). The feud came out in the open on November 18 last year after Mukesh Ambani admitted to ownership issues in the group.
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