Reliance’s Jio Launches $3.1 Billion IPO, Fully Subscribed Within Hours

Reliance Industries Ltd. has officially opened the initial public offering for its telecom and digital unit, Jio, marking billionaire Mukesh Ambani’s return to the capital market after 20 years. The $3.1 billion share sale was fully subscribed within hours of opening its books to retail investors on Wednesday, with the subscription period slated to close on October 23.

Ahead of the retail opening, marquee anchor investors including BlackRock Inc., Fidelity Management & Research, Capital Group, and Allianz SE secured stakes worth a combined $854 million at the top end of the marketed price range. The IPO is priced between ₹1,065 and ₹1,119 per share, valuing Jio at $107 billion at the upper end of the range. This valuation sits roughly 10 percent lower than its nearest sector rival, Bharti Airtel Ltd., which is valued at about $123 billion.

Financial metrics for the quarter ended June show Bharti leading the industry with an average revenue per user (ARPU) of ₹264, compared to Jio's ₹216. Bharti also leads in profitability with a 57.4 percent EBITDA margin, while Jio trails at 53.3 percent. Consequently, Jio is valued at 33.2 times trailing earnings, compared to nearly 37 times for Bharti. However, brokerages such as Nomura and Motilal Oswal Financial Services have valued Jio Platforms at a premium to Bharti based on enterprise value-to-Ebitda.

The listing comes a decade after Jio entered the Indian telecom market in 2016 with free calls and data, triggering a massive price war that reshaped the industry and eventually made Jio the market leader by user base and revenues by the summer of 2019. Mukesh Ambani’s oldest son, Akash Ambani, is leading the IPO process and emphasized the company's focus on service delivery and future growth.

With the capital raised from the public offering, a listed Jio Platforms plans to pre-pay a substantial portion of its debt. This debt reduction is intended to strengthen the balance sheet as the company prepares to compete in emerging sectors, including satellite communications against competitors like Elon Musk's Starlink, alongside ongoing developments in digital services and AI. Indian regulators are yet to clear applications for both firms in the satellite communications space.

Analysts remain optimistic about the company's prospects. Centrum Broking Ltd. noted that Jio is well-positioned for medium- to long-term growth driven by its network scale and digital ecosystem, while potential tariff hikes are expected to provide an immediate kicker to earnings.

"Jio’s public offering marks a major milestone for the Indian telecom sector and for Reliance Industries as it looks to unlock value from its digital assets. Pruning valuations to attract marquee global investors has clearly paid off, with the issue seeing rapid subscription. Going forward, using the IPO proceeds to strengthen the balance sheet and prepay debt will give Jio the financial flexibility needed to scale emerging technologies like satellite communications and digital services effectively." — Dr. Shishir Gupta, Founder & CEO, StartupLanes