Jio's record IPO sells very little of Jio

Bidding for Jio Platforms closed on Friday. At the top of its price band of ₹1,065 to ₹1,119 a share, the issue raises ₹30,213 crore, about $3 billion, making it the largest initial public offering in India's history, ahead of Hyundai Motor India's ₹27,870 crore in October 2024. It values the digital and telecoms arm of Reliance Industries at about ₹10.3 lakh crore, roughly $108 billion. The shares are due to list on the BSE and NSE on October 28.

Demand was never in doubt. What is less obvious is what buyers are getting. India's biggest IPO sells only a small slice of Jio, almost all the money raised goes to its lenders, and the company stays firmly under Reliance's control.

A record IPO with a small float

Jio is issuing up to 27 crore new shares, about 2.9 per cent of the company after the issue. None of its existing owners is selling. That float is possible only because of rules approved by the Securities and Exchange Board of India in September 2025 for very large companies. Firms worth more than ₹5 lakh crore after listing may now float as little as 2.5 per cent, provided the offer is worth at least ₹15,000 crore, and companies listing with less than 15 per cent in public hands get up to ten years to reach the usual 25 per cent minimum.

Before those rules, Jio would have had to sell at least 5 per cent, an offer of more than ₹50,000 crore. The smaller float made the deal easier to absorb, but it also means that for years most of Jio's shares will not trade. With few shares in circulation, prices can swing sharply when large funds buy or sell. Jio will also face a steady supply of new stock as it moves towards the 25 per cent public-shareholding minimum.

The money goes to the banks

Because every share is new, the proceeds go to Jio rather than to Reliance or to the outside investors that bought stakes in 2020. According to the prospectus, ₹27,500 crore, about 91 per cent of the money, will repay borrowings of Reliance Jio Infocomm, the telecoms subsidiary. The rest is for general corporate purposes.

That is a large repayment against Jio's balance sheet. Consolidated borrowings stood at ₹61,372 crore on June 30, according to the prospectus, so the issue retires close to half of them. Akash Ambani, Jio's chairman, has said the company is heading towards being net debt-free. The claim needs a caveat. Jio also owes the government deferred payments for spectrum, which SP Tulsian's analysis puts at about ₹1.04 lakh crore, and those obligations are not touched by the IPO. Business Today notes that deferred spectrum liabilities and depreciation will keep weighing on profits.

Who is buying

Institutions are buying heavily. On October 20, before the public offer opened, Jio placed 7.25 crore shares with 212 anchor investors at ₹1,119 each, raising ₹8,110 crore, about 27 per cent of the issue. According to banking sources cited by Business Today, the anchor book drew bids of more than ₹2.5 lakh crore. By 3pm on the final day the issue was subscribed 12.55 times, according to figures published by HDFC Securities, with qualified institutional buyers at 32.77 times and wealthy individuals at 13.38 times. Official totals from the exchanges follow the close.

Ordinary investors have been more cautious. The retail portion was subscribed 2.51 times at the same point, up from about 1.5 times a day earlier. For a company with more than 500 million customers and one of the best-known names in India, that is a modest response. The minimum bid was 12 shares, or ₹13,428 at the top of the band. Institutions wanted roughly thirteen times as much of their allocation as ordinary savers did of theirs.

Paying 33 times for a tariff bet

At the top of the band, buyers are paying about 33 times Jio's earnings per share of ₹33.63 for the year to March 2026. Jio is clearly profitable. It earned ₹30,049 crore after tax in that year on revenue of ₹1,46,885 crore. In the April to June quarter its EBITDA margin was 54.7 per cent.

The question is growth, and in Indian telecoms growth means tariffs. Jio's average revenue per user was ₹215.6 a month in the June quarter, up only 3 per cent on a year earlier. Bharti Airtel, its main rival, earns substantially more per user, about ₹257 by recent counts. Centrum Broking expects a tariff increase of about 12 per cent over the next three to four months, according to Business Today. Because the network is already built, most of any price rise would flow straight to profit. The valuation assumes that Jio and Airtel keep raising prices together and that no rival undercuts them. With Vodafone Idea weak, that has been the pattern of the past few years. It is not guaranteed.

A company inside a company

Buyers will be minority shareholders in a business that Reliance controls. Reliance owns 66.43 per cent before the issue and will keep about 64.4 per cent after it. The prospectus lists services that Jio relies on Reliance entities to provide under long-term agreements, and it acknowledges that the controlling shareholder's interests may differ from those of other investors. Jio Platforms is also less diversified than its name suggests. Reliance Jio Infocomm, the telecoms business, generates about 94 per cent of its EBITDA, according to the prospectus as summarised by analysts.

The early backers have done well. Meta paid ₹43,574 crore for 9.99 per cent of Jio in 2020, and Google paid ₹33,737 crore for 7.73 per cent. At ₹1,119 a share, the Lombard Review's calculation puts their combined stakes at about ₹1.77 lakh crore, a paper gain of roughly ₹1 lakh crore. Neither is selling in this issue.

What to watch

Final subscription figures from the exchanges follow the close, and allotment is expected on October 26. The listing on October 28 falls on the same day as the US Federal Reserve's decision on interest rates, an awkward date for a large new stock to start trading. Beyond the first day, the stock depends on two things: whether the tariff increase arrives on time, and whether Reliance treats its new minority shareholders well.