India’s second-richest man, Mukesh Ambani, is launching what could be the country’s biggest-ever initial public offering (IPO), despite a stock market downturn.
Mumbai-based Jio Platforms, a telecoms company backed by Meta Platforms and Google, is hoping to raise up to ۳۰۲bn rupees (£۲.۴bn) and is targeting a ۱۰.۳tn rupeesvaluation when it floats on the stock market from Wednesday.
Set up a decade ago as a subsidiary of Ambani’s conglomerate Reliance Industries, and led by Akash Ambani, the oldest son of patriarch Mukesh, Jio offers low-cost broadband to millions of Indians.
Jio secured ۲۱۲ anchor investors on Monday before its blockbuster IPO. They include some of the world’s largest fund managers, such as: BlackRock; Singapore’s sovereign wealth fund; the Abu Dhabi Investment Authority; Fidelity Investments; Schroders; JP Morgan Asset Management; Franklin Templeton; Invesco; and Prudential.
On Wednesday, shares will be offered to retail investors, and the IPO is set to close on Friday.
Reliance Industries said in a stock exchange filing last week that Jio had set a price range of ۱,۰۶۵ rupees to ۱,۱۱۹ rupees a share for its maiden share sale, offering up to ۲۷۰m new shares.
The family-owned conglomerate has been encouraging its ۴۰۰,۰۰۰-plus employees to buy shares, offering them a discount of ۵۴ rupees a share.
At the top end of the price range, Jio would be worth ۱۰.۳tn rupees, which would make it India’s fourth-largest company, behind its parent Reliance Industries, Bharti Airtel and HDFC Bank. It would be more than twice as much as the ۴.۹tn-rupee valuation in ۲۰۲۰, when Meta and Google invested in the company.
However, the top valuation is far below initial expectations of more than £۱۱۰bn when the telecoms group posted a draft prospectus in the summer.
It comes amid a broader stock market slowdown in India, with the blue chip Nifty ۵o index down more than ۱۲% this year.
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Jio launched its telecoms services in September ۲۰۱۶. It gained ۱۶ million subscribers in the first month, and topped ۱۰۰ million subscribers within ۱۷۰ days, according to Reliance Industries. It is credited with making mobile internet more affordable, by triggering a price war. The company intends to expand further into artificial intelligence, cloud computing and digital infrastructure.
Isha Ambani, who sits on Jio’s board as a director, told investors last week that the business idea was spawned by the poor connectivity she and her brother Akash faced when they returned to India on a break from studying in the US in about ۲۰۰۹-۱۰. She struggled to submit a college assignment online because the internet was not working.
“What followed was a conversation about why should India be left behind,” she said. “Akash firmly believed that the answer and solution to this was creating a digital technology platform company.”
