Jio Platforms' US$3.2b share sale draws bids covering all shares on offer within two hours
India's largest share sale, the first from Mukesh Ambani's Reliance in two decades, opened to the public on Wednesday and closes on Friday.
Jio Platforms' share sale, worth US$3.2 billion, drew enough bids to cover every share on offer within two hours of opening to the public on Wednesday (Oct 21), according to CNA. Reliance, controlled by billionaire Mukesh Ambani, has not sold shares to the public for two decades, and this offering, the biggest of its kind in India, ends that gap. BBC News describes the offering as the second mega IPO India has seen within a month, arriving even though equity markets are subdued.
A telecom giant goes public
Meta, Alphabet's Google and institutional investors are among those supporting Jio Platforms. The company houses the biggest telecoms business in India, a firm whose subscriber base tops 500 million. Only China Mobile ranks above it among telecoms operators that serve a single country, which puts it second in the world. Telecoms accounts for over 90 per cent of the revenue Jio generates. Profit for the company came to about US$3.2 billion over the twelve months to March, against US$15.5 billion in revenue.
Akash, Ambani's son, heads Jio's telecom arm, which launched in 2016 on the wager that Indians would go online much more if access cost next to nothing. Rivals including Bharti Airtel and Vodafone Idea lost customers to it as it offered inexpensive data along with free voice calls.
Bids and pricing
Institutional investors had placed bids covering 3.92 times the portion set aside for them, exchange data showed on Wednesday. Retail investors, who have around a third of the issue set aside for them, had bid for 0.35 times their quota so far. Bids worth more than US$25 billion poured in for the reserved portion, and earlier this week Jio Platforms handed out US$853 million of shares to global and domestic investors that included the Abu Dhabi Investment Authority and BlackRock.
Retail investors, along with employees and shareholders of Reliance, are taking part in the offering, which closes on Friday. Each share is priced within a range of 1,065 to 1,119 rupees. Trading begins on Oct 28, and the IPO puts a value of as much as US$108.3 billion on Jio Platforms. On Wednesday, US$123.38 billion was the market capitalisation of Bharti Airtel.
A faster start than other big sales
Large share sales in India usually get off to a slow start, as institutions frequently hold off on bidding until the closing hours. On its first day, 42 per cent of the recent National Stock Exchange of India share sale was subscribed, while the figure for Hyundai Motor India was just 18 per cent.
Aishvarya Dadheech, founder at Fident Asset Management, said the quick bidding was surprising. The success, in his view, came down to the telecom business of Jio. "Jio has changed India's telecom landscape and (the IPO) offers a very reasonable valuation with strong fundamentals," he said.
The plans were also pushed back in 2025, having been first announced in 2019 when Ambani pledged a listing within five years. The Iran war weakened appetite for IPOs, and a filing that had been planned for as early as March was postponed as a result.
