Reliance Industries Limited (RIL) is set to make history with its latest move as Jio Platforms files a Draft Red Herring Prospectus (DRHP) for an initial public offering (IPO) anticipated to raise a record $4 billion (₹37,000 crore). This IPO marks the first from the RIL stable in nearly two decades, following the Reliance Petroleum offering in 2006.
The IPO will involve a fresh issue of 270 million shares, representing 2.9% of Jio Platforms' total equity. The offering could value Jio Platforms at up to ₹13 lakh crore ($138 billion), positioning it ahead of rival Bharti Airtel, which has a market capitalization of ₹11.6 lakh crore. RIL currently holds 66.43% of Jio Platforms' pre-issue equity.
Proceeds from the IPO will be used to prepay up to ₹27,500 crore of loans at Reliance Jio Infocomm (RJIL), Jio Platforms' operating subsidiary, with the remainder allocated for general corporate purposes. The DRHP outlines plans for Jio Platforms to potentially extend funds to RJIL through various financial instruments.
The DRHP was initially deferred due to geopolitical tensions in West Asia and volatile equity markets. Originally, the plan involved shareholders offering their shares, but this was revised to a fresh issue. The IPO will be managed by a consortium of 19 book-running lead managers, including Kotak Mahindra Capital and Morgan Stanley India.
Large investors currently own approximately 30.9% of Jio Platforms. Notable stakeholders include Jaadhu Holdings, an affiliate of Meta Platforms, with a 9.98% stake, and Google International, holding 7.73%. Other minority stakeholders include Saudi Arabia's Public Investment Fund and Silver Lake.
The IPO is expected to allocate up to 50% of the net issue to qualified institutional buyers, with at least 35% reserved for retail investors and no less than 15% for non-institutional investors.
Background
This IPO is significant as it could reshape the competitive landscape in India's telecom sector, especially with Jio Platforms' focus on strategic priorities such as 5G network expansion and AI services.
Investors and market analysts will closely watch the developments as Jio Platforms progresses with its IPO plans.
