Only 2.5 per cent of the equity in Jio Platforms will be offloaded through the OFS route -- meant for secondary share sale.
Key Points
- Reliance Jio is set to file its DRHP soon, marking the beginning of what could be India's largest IPO.
- The company is targeting a valuation of around $125 billion, with IPO size expected to exceed $3 billion.
- Only 2.5 per cent equity will be offloaded through the offer for sale route, with no fresh capital raise planned.
In his annual general meeting speech on August 12, 2019, Reliance Industries Ltd (RIL) Chairman and Managing Director Mukesh Ambani had given more than a hint, for the first time before the public, about listing the group's telecom and retail companies within the next five years.
Six-and-a-half years later, in the biggest project so far for Akash Ambani, RIL's Jio Platforms -- the holding company for the telecom operator of the group -- is ready to file its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi).
"It could happen within days," a source indicated, adding that the new financial year 2026-2027 (FY27) could well begin with Jio's initiation into the initial public offering (IPO) process.
Mukesh Ambani-led Jio, which entered the telecom sector as a disruptor in 2016, is going for an IPO under the leadership of his elder son Akash in 2026.
In 2022, Akash took charge of Jio as chairman after Mukesh Ambani stepped down in a clear sign of succession planning.
It is learnt that 2.5 per cent of the equity in Jio Platforms will be offloaded through the OFS (offer for sale) route -- meant for secondary share sale.
While the valuation of the company at the time of listing, which could take some months, will depend on various factors including the market condition, RIL is considering a ballpark range of $125 billion or thereabouts at present.
At this valuation, the Jio IPO size could be at over $3 billion, making it the biggest in India so far.
The Life Insurance Corporation (LIC) IPO in May 2022 was for $2.5 billion and Hyundai's in October 2024 stood at $2.97 billion.
RIL is unlikely to shed any stake and the company is not looking to raise fresh capital during the IPO.
Some of the existing investors in the company may divest their shares. There will be gains for shareholders on listing, according to a source.
Along with Akash Ambani, chairman of Reliance Jio, the team that's steering the conglomerate's first major IPO in some 20 years includes Chief Financial Officer Saurabh Sancheti, Managing Director Pankaj Pawar and Head of Strategy Anshuman Thakur.
A battery of 17 investment bankers would be seen backing the mega IPO.
Reliance Jio's IPO readiness follows a recent finance ministry circular relaxing the IPO rules.
Now, companies with a post-issue market value exceeding Rs 5 trillion can dilute a minimum of 2.5 per cent equity, down from 5 per cent earlier.
In India, Jio is the largest telco at over 491 million wireless. Its closest rival, Sunil Bharti-led Bharti Airtel is at 467 million mobile subscribers.
The average revenue per user (ARPU), which is a profitability benchmark for a telco, is pegged at Rs 213.7 a month per user for Jio against Rs 259 for Airtel.
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Feature Presentation: Aslam Hunani/Rediff
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