Jio Platforms shares surged 21.5 per cent on their trading debut on Wednesday following a record initial public offering (IPO) that attracted strong demand from retail and institutional investors.
The Indian telecom and digital services giant recorded a market capitalisation of 12.5 trillion rupees, equivalent to $131 billion, making it the second-most valuable company in India after its parent company, Reliance Industries, according to data from the National Stock Exchange (NSE).
The strong debut could pave the way for Jio Platforms’ eventual inclusion in major benchmark indices, potentially attracting additional investors and supporting its share price.
Deven Choksey, founder and managing director of wealth management firm DRChoksey FinServ, told CNBC that inclusion in key indices would generate sufficient demand to protect the stock from potential oversupply.
He added that some investors who acquired stakes in Jio around 2021 might seek to exit within six months, by which time the company’s shares could be included in the MSCI index and India’s Nifty 50 benchmark.
Jio Platforms raised 302 billion rupees, approximately $3.2 billion, through the sale of 270 million shares priced at 1,119 rupees each, making it the largest IPO in India’s history.
The offering was subscribed more than 22 times, with institutional investors accounting for the strongest demand, according to data from the Bombay Stock Exchange (BSE).
The qualified institutional investors’ portion was subscribed 70.55 times, while retail investors subscribed 2.72 times their allocated portion.
Jio Platforms Managing Director Akash Ambani, son of billionaire Mukesh Ambani, said the IPO was fully subscribed within 95 minutes of opening on October 21.
Global brokerage firm Nomura assigned Jio Platforms a buy rating on Wednesday, setting a target price of 1,340 rupees, which represented a potential upside of 19.7 per cent against the IPO price.
In its report, Nomura said Jio’s capital expenditure cycle was largely complete, with a sharp improvement in free cash flow expected.
However, the shares were last trading at 1,360 rupees, above Nomura’s target price.
Reliance Industries, controlled by billionaire Mukesh Ambani, owns more than 66 per cent of Jio Platforms, according to LSEG data.
Meta Platforms’ affiliate Jaadhu Holdings holds nearly 10 per cent, while Google International owns 7.7 per cent.
Major global investment firms, including BlackRock, Capital Group and Singapore’s GIC, also participated in Jio’s anchor investor offering, which reserves shares for large institutional investors before public bidding begins.
Including anchor investors, the IPO attracted demand worth $78 billion, underscoring strong investor interest in the company’s market debut.
Boluwatife Enome
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