Jio Platforms’ stock rose 21.5% in its trading debut on Wednesday after a record initial public offering that saw participation from institutional as well as retail investors.
Jio has a market capitalization of 12.5 trillion rupees ($131 billion), making it India’s second-highest-valued company after parent Reliance Industries, according to NSE data. This paves the way for its eventual inclusion in major benchmark indices.
Deven Choksey, founder and managing director of asset management firm DRChoksey FinServ, told CNBC that the inclusion will create enough demand and protect stocks from oversupply.
He added that some investors who acquired Jio shares around 2021 may want to exit within about six months. The stock is likely to be included in the MSCI index by then. nifty 50.
India’s largest telecom and digital services company offered 270 million shares at 1,119 rupees each in the IPO, raising 302 billion rupees ($3.2 billion) in the country’s largest-ever IPO.
The public issue was subscribed more than 22 times, with institutional investors leading the demand, according to BSE data. The qualified institutional investor portion was subscribed at 70.55 times and the subscription by retail investors was 2.72 times.
Akash Ambani, managing director of Jio Platforms and heir to Indian billionaire Mukesh Ambani, said ahead of the listing that the IPO was fully subscribed within 95 minutes of opening on October 21.
Global brokerage firm Nomura on Wednesday gave Jio Platforms a buy rating and set a target price of Rs 1,340, implying a 19.7 per cent upside in the IPO price. The brokerage said in a report that Jio’s capex cycle is almost over and the company’s free cash flow is expected to improve significantly.
The stock last traded at Rs 1,360.
Indian billionaire Mukesh Ambani’s flagship company Reliance Industries owns over 66% of Jio Platforms, followed by Jaadhu Holdings, an affiliate of Meta Platforms, with nearly 10% and Google International with 7.7%, according to LSEG data.
Leading global funds such as BlackRock, Capital Group and GIC participated in the anchor book portion of Jio’s total funding, which will be reserved for large institutional investors before the opening of public bidding for the IPO. Including anchor investors, the stock offering attracted demand of $78 billion.
