- Jio Platforms’ $3.2 billion IPO fully booked in under two hours
- Offering subscribed 3.16 times on day one
- IPO values Ambani’s telecom giant at up to $108.3 billion
- Shares to start trading October 28
INVESTORS rushed to buy into Jio Platforms’ $3.2 billion initial public offering Wednesday, with bids covering all the shares on offer in under two hours, in India’s largest IPO and the first by Mukesh Ambani’s Reliance in 20 years.
By the end of the first day, the offering was subscribed 3.16 times. Institutional investors filled their allotted portion in 10 minutes, and the overall book was covered within 100 minutes, two people close to the IPO told Reuters.
“It’s the fastest in the history of India,” one said.
The IPO values Jio Platforms at up to $108.3 billion, potentially making it one of India’s most valuable companies when trading begins October 28. Rival Bharti Airtel had a market value of $123.38 billion Wednesday.
A rare fast start
Big Indian IPOs usually start slowly, with institutions often waiting until the final hours to bid. The National Stock Exchange of India’s recent share sale was only 42 percent subscribed on its first day, and Hyundai Motor India’s just 18 percent.
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“Jio has changed India’s telecom landscape and (the IPO) offers a very reasonable valuation with strong fundamentals,” said Aishvarya Dadheech, founder of Fident Asset Management.
Institutions have so far shown far more enthusiasm than retail investors. Qualified institutional buyers bid for 9.42 times their reserved portion, while retail investors, who are allotted around a third of the issue, bid for 0.73 times theirs. The pace of new bids slowed after the early morning rush, exchange data showed.
Earlier this week, Jio allotted shares worth $853 million to more than 200 anchor investors, including the Abu Dhabi Investment Authority and BlackRock, after the reserved portion drew bids of more than $25 billion.
The offering closes Friday, with shares priced at 1,065 to 1,119 rupees (about $11 to $11.60) each.
India’s telecom giant
Backed by Meta, Google and institutional investors, Jio Platforms owns India’s largest telecom company, with more than 500 million subscribers. That makes it the world’s second-largest telecom operator in a single country after China Mobile.
The telecom business, led by Ambani’s son Akash, launched in 2016 on a bet that Indians would use far more internet data if it were almost free. It quickly took market share from rivals such as Bharti Airtel and Vodafone Idea with cheap data and free voice calls.
Almost 90 percent of Jio’s revenue comes from telecom. The company earned about $3.2 billion in profit on $15.5 billion in revenue in the year to March.
Up to $2.89 billion of the proceeds will be used to repay debt at its telecom unit, with the rest going to general corporate purposes, including capital spending.
A long-awaited listing
Ambani first promised a Jio listing in 2019. The plans were delayed in 2025, and a filing for as early as March was pushed back after the Iran war dampened appetite for IPOs.
Jio is chasing India’s biggest IPO yet
Jio is launching the offering during the Hindu festive season, considered an auspicious time for purchases, though Indian markets have been subdued in recent weeks.
Reliance paid its more than 400,000 employees about 15 days early this month and helped people open share-trading accounts ahead of the IPO, a person with direct knowledge of the matter said. Reliance did not respond to a request for comment.
For many Indian families, Reliance shares have long been a source of savings for education and weddings. Its Mumbai-traded stock has risen around 330-fold since 1990.
(With inputs from Reuters)
