Jio Platforms draws 22.19 times bids for IPO

Jio Platforms’ ₹30,213-crore initial public offering drew bids for 22.19 times the shares available by its Oct. 23 close, Business Standard reported, citing stock-exchange data.

The Oct. 23 market-news report put the possible market value at ₹10.3 trillion, or roughly $109 billion, at the price-band top. That would exceed Facebook’s $104 billion valuation at its 2012 IPO.

“Jio Platforms IPO demand was much better than anticipated, especially the institutional subscription,” Ambareesh Baliga, an independent market analyst, told Business Standard.

Qualified institutional buyers, large professional investors grouped separately from retail bidders, bid for 70.55 times their reserved portion, compared with 36.5 times a day earlier. They sought 3,457.6 million shares against 49 million set aside for them.

Public demand exceeded ₹4.9 trillion, excluding the anchor book, while total demand including anchor investors crossed ₹7.4 trillion, the report said. Applications approached 13.9 million, and retail demand exceeded ₹25,867 crore.

The demand skewed heavily toward institutions. Foreign portfolio investors bid for 1,239.3 million shares, domestic financial institutions including banks and insurers sought 1,525 million, and mutual funds bid for 357.1 million.

Retail investors subscribed for 2.72 times their allocation, up from 2.23 times a day earlier. Non-institutional investors, a category covering larger non-retail bidders, subscribed for 14 times their quota, while existing shareholders bid for 7.60 times their allocation and employees for 2.93 times.

The sale is a fresh issue, meaning Jio Platforms is selling new shares rather than existing holders selling stock. A syndicate of 19 banks is managing the offering, with ₹2,500 crore reserved for Reliance Industries shareholders and ₹500 crore for employees, who receive a 5% discount.

Jio Platforms houses the Reliance group’s telecom and digital operations. Business Standard said the IPO is the group’s first since Reliance Petroleum in April 2006 and follows Reliance Textile Industries’ ₹2.8-crore public issue in 1977.

The valuation test is not settled by subscription data. Baliga told Business Standard the pricing had “left something on the table” for allottees, while Geetanjali Kedia of S P Tulsian Investment Advisory Services said retail demand was affected by the market decline and the size of the offering.

Kranthi Bathini, equity strategist at WealthMills Securities, told Business Standard that possible inclusion in the NSE Nifty 50 and BSE Sensex was one source of demand, if it happens. Reliance Industries stock rose 0.46% on Friday to ₹1,190, though it fell 1.75% over the week, the report said.

Allotment is expected on Oct. 26, according to Atlas360 background. The checkable item is how shares are allocated across categories after the 22.19-times subscription.

Jio Platforms shares are scheduled to list on Oct. 28. The first test is whether the stock opens above the ₹1,119 upper end of the IPO price band.

Source: market-news report, Business Standard, Oct. 23