Jio Platforms' $3.2 billion IPO was fully subscribed in less than two hours of public bidding on Wednesday, as investors flocked to India's largest share sale and the first from billionaire Mukesh Ambani's Reliance in two decades.
With backing from Meta Alphabet's Google and institutional investors, Jio Platforms is home to India's biggest telecoms company with more than 500 million subscribers, making it the world's second-largest telecoms operator in a single country after China Mobile.
The Jio Platforms IPO will be a major test of global appetite for new share offerings at a time when investors have sharpened their scrutiny of AI-related companies, which some analysts say could see them pivoting away from the technology. More than 90% of Jio's revenue comes from the telecoms business.
The investor rush comes even as big IPOs in India generally start slowly, with institutions often waiting until the final hours to bid. In other big IPOs, the National Stock Exchange of India's share sale recently was only 42% subscribed on its first day, and Hyundai Motor India's only 18%.
Aishvarya Dadheech, founder at Fident Asset Management, said Jio's rapid IPO bidding was surprising given large IPOs in India typically get fully subscribed in the later days of the offering. He attributed the success to Jio's telecom business.
"Jio has changed India's telecom landscape and (the IPO) offers a very reasonable valuation with strong fundamentals," he said.
Jio's telecom business, led by Ambani's son Akash, began in 2016 with a bet that Indians would use the internet far more if it cost almost nothing. It rapidly took market share from rivals such as Bharti Airtel and Vodafone Idea by offering cheap data and free voice calls.
The IPO values Jio Platforms at up to $108.3 billion, potentially making it one of India's biggest companies by market capitalisation when trading starts on October 28.
Bharti Airtel's market capitalisation on Wednesday stood at $123.38 billion.
QUICK BIDS
Institutional investors have bid for 3.92 times their reserved portion in the IPO, exchange data showed on Wednesday. Retail investors, for whom around a third of the issue is reserved, have so far bid for 0.35 times their quota, the data showed.
For many Indian investors, Ambani's Reliance Industries which listed in 1977, has been a long-term wealth generator and a savings vehicle that helped pay for a child’s education or a wedding. The company's businesses stretch from oil to retail.
Since 1990, for which LSEG data is available, Reliance's Mumbai-traded shares have roughly gained 330-fold.
Jio Platforms this week allotted shares worth $853 million to global and domestic investors including the Abu Dhabi Investment Authority and BlackRock after the reserved portion for such investors drew bids totalling more than $25 billion.
Source: Reuters
– Agencies
