Billionaire Mukesh Ambani's Jio launches India's biggest share sale
India's second mega IPO in a month comes despite subdued equity markets and aims to raise $3.2bn.
Billionaire Mukesh Ambani’s Jio begins India’s largest share sale
Mukesh Ambani, India’s richest man, is bringing his digital and telecoms business to public investors for the first time in what is expected to be the country’s biggest share sale.
Jio Platforms, a subsidiary of conglomerate Reliance Industries Ltd, plans to raise 302bn rupees ($3.2bn; £2.8bn) through an initial public offering (IPO) of newly issued shares starting Wednesday.
The company intends to use the proceeds to repay borrowings taken to build and expand Reliance Jio Infocomm Ltd, India’s biggest private-sector telecoms operator.
This is India’s second major IPO in a month, following the National Stock Exchange’s $2.4bn issue, even though the wider equity market remains weak.
Arun Kejriwal of Kejriwal Research and Investment Services told the BBC that although the stock market has stayed subdued, the IPO market has been active, drawing interest from institutional and retail investors because of appealing valuations and enthusiasm for new, scalable technology businesses.
He said IPOs are being priced to reflect lower valuations and price-to-earnings (P/E) ratios among listed firms, which makes them attractive. The P/E ratio shows how much investors are prepared to pay for each unit of a company’s earnings.
Jio Platforms is offering shares in a price range of 1,065 to 1,119 rupees in the issue, which closes Friday.
The share sale comes as the Nifty 50, the NSE’s benchmark index of 50 leading Indian companies, has dropped by more than 12% this year.
According to a Reuters report, institutional investors on Monday submitted bids worth $3.2bn, or 30 times the shares set aside exclusively for them and offered before the IPO opened.
That response from institutional investors matches analysts’ view that buyers will be attracted by Jio’s scale, network infrastructure and established customer ties.
Centrum Institutional Research, part of an Indian brokerage, said in a note that “with strong network leadership, large scale infrastructure, and a deepening digital ecosystem, Jio is well positioned to sustain industry-leading growth over the medium-to-long term”.
However, analysts also warn that competition is likely to stay fierce, with price wars and possible customer churn.
Recently, technology billionaire Elon Musk publicly challenged low-cost Reliance Jio, saying his Starlink satellite internet service will be priced affordably in India.
Musk criticised Ambani on the social media platform X as his satellite internet company struggles to secure final approval for a commercial launch in India.
The criticism intensified when Musk questioned whether Ambani was the “real boss of India”. Ambani and Reliance did not directly respond to the attacks.
The IPO roadshows were led by Ambani’s twins Isha and Akash, who hold key roles in Jio Platforms.
Jio also faces regulatory uncertainty, even as the federal government has become the largest stakeholder in rival Vodafone Idea after converting its dues into equity as part of a relief package.
Equity experts say Jio Platforms remains exposed to regulatory risks because India’s telecom sector is subject to extensive government oversight.
Retail investors have long seen Reliance group companies as wealth creators and have looked forward to IPOs from the conglomerate.
Founder Dhirubhai Ambani famously described shareholders as part of the “Reliance family”, a tradition that has continued and built a loyal retail investor base.
The Jio Platforms IPO is the group’s first public offering in two decades and marks a shift in leadership to the next generation of Ambanis.
Investor roadshows were led by Jio Platforms Managing Director Akash Ambani and Reliance Retail Ventures Executive Director Isha Ambani, the twin children of Reliance Chairman Mukesh Ambani, who stayed away from investors and shareholders this time.