Reliance Jio set to raise around Rs40,000 crore through initial share sale

Reliance Jio, the telecom technology and retail platform of Mukesh Ambani-led Reliance Industries Ltd (RIL), is working on an initial public offer (IPO) of shares to raise up to Rs40,000 crore. 

While details of the IPO plan are yet to be finalised, reports say, the issue could be a mix of fresh shares and an offer-for-sale (OFS) by promoters and shareholders of the company.

Reliance Jio is also reported to be looking at a valuation of around Rs10 lakh crore ($120 billion), for the purpose of the IPO.

The company is currently in the process of selecting investors for pre-IPO placement.

The IPO, the biggest in India so far, is expected to hit the market in the second half of this year.

Reports also suggest the despite pre-IPO placements that have already started, the issue will have enough portion to satisfy retail interest.

Details about the ratios of pre-IPO placement, the sizes of fresh issue as well as the OFS portion are yet to be known.

However, RIL is reported to be allowing partial or full exit by several existing investors, which points to a bigger OFS size.

Foreign investors, including Abu Dhabi Investment Authority (ADIA), Silver Lake, Mubadala, KKR etc, currently hold about 33 per cent stake in Reliance Jio. RIL had sold Jio stake to several global investors to raise around $18 billion in 2020.

Reliance Jio is currently the largest telecom and broadband service provider in the country. But, of late, emerging technologies and cheaper alternatives have started challenging its position as the country’s top service provider.

The roll-out of 5G technology and satellite internet have added to Jio’s technology challenges. 

The probable entry of satellite service providers like Elon Musk’s Starlink could destabilise Jio’s current platform.