Jio Platforms Debuts: Shares Jump 21% to Value Firm at $131 Billion

Investors in Jio Platforms saw immediate gains on Wednesday as the stock rose 21.5% in its first full day of trading. The surge valued the company at 12.5 trillion rupees, or approximately $131 billion, placing it as the second most valuable firm in India. Only its parent company, Reliance Industries, currently holds a higher market capitalization, according to data from the National Stock Exchange.

The listing marks the conclusion of the country's largest initial public offering in history. Jio offered 270 million shares at a price of 1,119 rupees each, generating 302 billion rupees ($3.2 billion) in new capital. Demand for the shares far exceeded the available supply, with the entire public issue subscribed more than 22 times. Institutional investors drove the bulk of this demand, subscribing to the qualified institutional portion 70.55 times, while retail investors subscribed 2.72 times.

Akash Ambani, managing director of Jio Platforms, stated that the IPO was fully subscribed within 95 minutes of opening on October 21. He described the response as a strong signal of market confidence in the company's digital infrastructure and services. The anchor portion of the offering, reserved for large institutional investors, attracted participation from global funds including BlackRock, Capital Group, and GIC. Total demand, including anchor investors, reached $78 billion.

Deven Choksey, founder and managing director of DRChoksey FinServ, noted that inclusion in major benchmark indices will likely support the stock price. He expects Jio to be added to the MSCI index and the Nifty 50 within roughly six months. This timeline aligns with potential exit strategies for investors who acquired stakes in the company around 2021. Choksey argued that index inclusion would create steady demand, mitigating risks from any future share oversupply.

Nomura, a global brokerage, issued a buy rating for Jio Platforms on Wednesday. The firm set a target price of 1,340 rupees, which implies a 19.7% increase from the IPO price. In its report, Nomura stated that Jio's capital expenditure cycle is largely complete. The brokerage projected a sharp improvement in the company's free cash flow as a result.

Reliance Industries, the flagship company of Indian billionaire Mukesh Ambani, retains a stake of more than 66% in Jio Platforms. Meta Platforms' affiliate, Jaadhu Holdings, owns nearly 10% of the company, while Google International holds 7.7%, according to LSEG data. At the close of Wednesday's trading, Jio shares stood at 1,360 rupees, reflecting the strong opening performance.