MUMBAI: Jio Platforms’ US$3.2 billion IPO was fully subscribed in less than two hours of public bidding on Wednesday (Oct 21), as investors flocked to India’s largest share sale and the first from billionaire Mukesh Ambani’s Reliance in two decades.
With backing from Meta, Alphabet’s Google and institutional investors, Jio Platforms is home to India’s biggest telecoms company with more than 500 million subscribers, making it the world’s second-largest telecoms operator in a single country after China Mobile.
The Jio Platforms IPO will be a major test of global appetite for new share offerings at a time when investors have sharpened their scrutiny of AI-related companies, which some analysts say could see them pivoting away from the technology. More than 90 per cent of Jio’s revenue comes from the telecoms business.
The investor rush comes even as big IPOs in India generally start slowly, with institutions often waiting until the final hours to bid. In other big IPOs, the National Stock Exchange of India’s share sale recently was only 42 per cent subscribed on its first day, and Hyundai Motor India’s only 18 per cent.
Aishvarya Dadheech, founder at Fident Asset Management, said Jio’s rapid IPO bidding was surprising given large IPOs in India typically get fully subscribed in the later days of the offering. He attributed the success to Jio’s telecom business.
“Jio has changed India’s telecom landscape and (the IPO) offers a very reasonable valuation with strong fundamentals,” he said.
Jio’s telecom business, led by Ambani’s son Akash, began in 2016 with a bet that Indians would use the internet far more if it cost almost nothing. It rapidly took market share from rivals such as Bharti Airtel and Vodafone Idea by offering cheap data and free voice calls.
The IPO values Jio Platforms at up to US$108.3 billion, potentially making it one of India’s biggest companies by market capitalisation when trading starts on Oct 28.
Bharti Airtel’s market capitalisation on Wednesday stood at US$123.38 billion.
QUICK BIDS
Institutional investors have bid for 3.92 times their reserved portion in the IPO, exchange data showed on Wednesday. Retail investors, for whom around a third of the issue is reserved, have so far bid for 0.35 times their quota, the data showed.
For many Indian investors, Ambani’s Reliance Industries , which listed in 1977, has been a long-term wealth generator and a savings vehicle that helped pay for a child’s education or a wedding. The company’s businesses stretch from oil to retail.
Since 1990, for which LSEG data is available, Reliance’s Mumbai-traded shares have roughly gained 330-fold.
Jio Platforms this week allotted shares worth US$853 million to global and domestic investors including the Abu Dhabi Investment Authority and BlackRock after the reserved portion for such investors drew bids totalling more than US$25 billion.
Retail investors, as well as employees and shareholders of Reliance, are participating in the offering that closes on Friday and has a price range set at 1,065 to 1,119 rupees per share.
FESTIVE LAUNCH DATE
The IPO is the first from Reliance since 2006.
Ambani first promised a listing within five years in 2019, and the plans were also delayed in 2025. A filing for as early as March was pushed back after the Iran war dampened IPO appetite.
Jio Platforms is pitching its IPO during an ongoing Hindu festive season, which is considered auspicious for purchases, but at a time when Indian markets have remained subdued in recent weeks.
Reliance paid its more than 400,000 employees their salaries about 15 days early this month, and the company helped facilitate share account-opening services in recent weeks to those interested in applying for the IPO, a person in the industry with direct knowledge of the situation said.
Reliance did not respond to a request for comment.
Jio Platforms earned about US$3.2 billion in profit on US$15.5 billion of revenue in the year to March.