Ambani’s US$3.2bil Jio IPO attracts rapid bids in record Indian sale

MUMBAI: Jio Platforms' US$3.2 billion IPO attracted 85% subscription within the first hour of bidding on Wednesday, as investors rushed to purchase shares in India's largest share sale and the first from billionaire Mukesh Ambani's Reliance in two decades. The IPO will be a crucial test of global interest in new share offerings amid heightened scrutiny of AI-related companies, with some analysts predicting a shift away from the technology.

Supported by Meta, Alphabet's Google, and institutional investors, Jio Platforms owns India's largest telecom company, boasting over 500 million subscribers and ranking second globally in single-country operators, after China Mobile. Institutional investors have placed bids worth 2.8 times their reserved shares, while retail investors, who are granted a third of the issue, have bid for 0.14 times their quota, according to exchange data.

The IPO values Jio Platforms at up to US$108.3 billion, potentially positioning it as one of India's biggest companies by market capitalization upon listing on Oct 28. Around a third of the shares are reserved for retail investors. Jio Platforms has allocated US$853 million in shares to global and domestic investors, including Abu Dhabi Investment Authority and BlackRock, following bids totaling over US$25 billion for the reserved portion.

Retail investors, employees, and shareholders of Reliance will participate in the offering, which closes on Friday and offers a price range of 1,065 to 1,119 rupees per share. The IPO marks the first from Reliance since 2006 and surpasses previous major listings like Hyundai Motor India and National Stock Exchange. Ambani initially committed to a listing within five years in 2019, with plans delayed in 2025 due to the Iran war dampening IPO appetite.

Jio Platforms' telecom division, spearheaded by Ambani's son Akash, started in 2016, capitalizing on the idea that Indians would use the internet more if it cost nearly nothing. The company quickly gained market share from rivals Bharti Airtel and Vodafone Idea by providing affordable data and free voice calls. Jio Platforms announced its IPO during the Hindu festive season, considered fortunate for purchases, but noted that Indian markets have been relatively subdued in recent weeks.

Reliance paid its 400,000 employees their salaries about 15 days early in the month, and facilitated share account opening services for interested applicants. Reliance declined to comment on the matter. Jio Platforms generated approximately US$3.2 billion in profit on US$15.5 billion in revenue in the year ending March, with around 90% of the figures attributed to its telecom operations.