Jio Platforms Shares Open 21.5% Higher After $3.2 Billion IPO
The listing values the Reliance Industries subsidiary at $131 billion, second only to its parent company in India.
By Bianca Shevchenko ·
Jio Platforms began trading sharply higher on Wednesday.
Shares jumped 21.5% from the 1,119 rupee offer price, reaching 1,360 rupees. The listing follows the largest IPO ever held in India, which raised 302 billion rupees, or $3.2 billion, by selling 270 million shares. Demand outpaced the available stock: the issue was covered more than 22 times over, according to data from the BSE. Institutional buyers drove that demand, with the qualified institutional portion subscribed 70.55 times, while retail orders reached 2.72 times. Akash Ambani, managing director of Jio Platforms, said the issue was fully subscribed within 95 minutes of opening on Oct. 21.
The opening price puts Jio Platforms' market value at 12.5 trillion rupees, or $131 billion. NSE data shows that figure places the telecom and digital services company second in India behind its parent, Reliance Industries. Deven Choksey, founder and managing director at DRChoksey FinServ, said index inclusion would generate demand and shield the stock from excess supply. He added that some investors who bought stakes in Jio around 2021 may look to exit in roughly six months, by which point the shares would likely sit in the MSCI index and the Nifty 50.
Nomura assigned a buy rating on Wednesday with a target of 1,340 rupees, a 19.7% premium to the IPO price. The brokerage wrote that Jio's capital expenditure cycle is largely complete and that free cash flow is expected to improve sharply.
Reliance Industries, the flagship company of Mukesh Ambani, holds more than 66% of Jio Platforms. Jaadhu Holdings, an affiliate of Meta Platforms, owns nearly 10%, and Google International holds 7.7%, according to LSEG data. BlackRock, Capital Group and GIC took part in the anchor book, which is reserved for large institutional investors before public bidding opens. Including those anchor investors, demand for the offering reached $78 billion.
Jio Platforms offered its shares at 1,119 rupees on Oct. 21. Shares last traded at 1,360 rupees.
Source: CNBC
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