India Readies for Largest-Ever IPO
Jio Platforms, backed by Meta and Google, is due to list on Wednesday. Here’s what to watch in the offering.
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India will witness the largest initial public offering (IPO) in the history of its markets, if all goes as planned Wednesday.
Jio Platforms, the largest telecom in India, is due to list on October 28. It is selling 270 million shares at 1,119 rupees apiece, raising 302.1 billion rupees ($3.2 billion).
That will give Jio a total market capitalization, at the listing price, of $109 billion. Such a market value would make it the third-biggest Indian company.
Backed by Meta and Google
Mumbai-based Jio has taken in private investment from Meta Platforms (META), which will be the largest outside shareholder with a 9.7% stake after the offering, as well as Google (GOOGL), second-largest with a 7.5% holding. It is also backed by KKR (KKR), other U.S. private-equity investors, and the sovereign wealth funds of Saudi Arabia and Abu Dhabi.
BlackRock (BLK), BNP Paribas (BNPQY), Fidelity, Franklin Templeton (BEN) and JPMorgan Chase (JPM) rank among the new investors taking up anchor positions as institutional investors in the listing. Local insurers led by the massive Life Insurance Corporation of India (NSE:LICI) are also acting as anchors.
Perhaps most importantly, Jio has the backing of arguably the best Indian blue chip company in the form of Reliance Industries (NSE:RELIANCE), which started the telecom service in 2016. Reliance will retain a 64.4% stake after the offer.
Part of the Ambani Empire
Reliance is led by Mukesh Ambani, India’s second-richest citizen with an $86.3 billion fortune, according to Forbes. Only Adani Group chairman Gautam Adani, at $112.7 billion, has a fatter wealth chest.
Mukesh’s elder son, Akash Ambani, leads Jio as managing director, with his father as chairman. The company delivers mobile service, broadband Internet and fiber services to Indian households, but also operates via satellite in remoter parts of India. And it has built out a broad consumer ecosystem, with music and TV streaming, instant messaging, and e-commerce offerings such as the Amazon-like JioMart.
The telecom will be listing on both the Bombay Stock Exchange and the National Stock Exchange of India, where its ticker will be JPL. It will outdo the 2024 listing of Hyundai Motor India (NSE:HYUNDAI), at $2.9 billion, as the largest IPO on record in India.
Selling Shares at a Discount
Both Jio and Reliance have been offering shares to their employees, with a combined work force of some 420,000, at a discounted price of 54 rupees, from a capped pool of $53 million. Jio itself had just under 28,000 full-time employees as of the end of June, and a total work force of around 75,000.
Its market cap would be outdone only by its Reliance parent, India’s largest listing at a $171 billion market value, as well as telecom rival Bharti Airtel (NSE:BHARTIARTL), at $131 billion, and HDFC Bank (NSE:HDB), at $110 billion. ICICI Bank is just slightly smaller in size at $104 billion.
Customer Base 56% Larger Than U.S. Population
The scope of Jio is vast. It has 533.3 million customers as of the end of June, up 8.9% over the prior quarter. In other words it serves 56% more accounts than the entire U.S. population.
It quickly garnered market share after the service was launched in 2016 by offering “free” voice calls to subscribers, and cheap data. That built it into India’s largest telco. Bharti Airtel and Vodafone Idea (NSE:IDEA) are its main mobile-service competitors, the ranks of 17 operators having shrunk essentially to those three.
The company turned a $3.3 billion net profit on total revenue of $15.8 billion for the fiscal year ended in March. Profits were up 16.0% for the year.
Is there scope for that customer base to expand? India has 1.48 billion people as of October, so Jio already serves roughly one-third of the people in the world’s most-populous nation.
But India is also a relatively youthful nation, with a median age of 30, and most importantly is one that’s still growing. The population count is projected to peak at 1.7 billion in 2061.
Tough Time for Indian Equities
Still, this is a strange time for Indian equity markets, which have suffered all of this year, leaving them down 13.0% so far in 2026. It is their second successive slump — a January all-time high finally reset their September 2024 peak, but both high marks have been followed by a drastic decline.
The Nifty 50 as a result now sits where it was in May 2024 as a result. The Sensex benchmark has performed much the same.
That’s despite India notching up the fastest economic growth rate of any major nation, at an annualized pace above 7.0% over the last three years. Gross domestic product is up 7.8% year on year as of August, temporarily outdone by the chip-driven boom in Taiwan and South Korea but likely to remain above 7.0% for the foreseeable future.
It will a test of India’s capital markets to see Jio list. This is the first spinout from Reliance in 20 years, the last being Reliance Petroleum in 2006, which merged back into its parent three years later.
Pressure to Maintain Margins
There will be shareholder pressure on Jio to maintain profit margins, after a period when it undercut competitors and forced them out of business to win market share. Future profits likely depend on it increasing “earnings per subscriber,” by keeping them within the broader Jio ecosystem.
Revenue from digital services such as cloud computing and gaming grew 36% year on year, but currently still represents only 12% of total sales.
Jio is listing at the top of its range, at a price/earnings ratio around 31 times 2027 earnings, similar to Bharti Airtel. So we will see where its shares head after hitting the public markets. The offer was covered within 100 minutes of going on sale, according to IPO insiders, whereas institutions have waited until the last minute to buy into other recent large stock listings.
The company pushed back an intended listing from 2025 due to geopolitical and market tensions. It then further pushed the window from March this year to October.
Jio’s parent Reliance has not been spared the Indian market selldown. Its shares are down 24.1% so far in 2026, significantly underperforming the benchmarks, as higher raw-material and energy costs dent margins in its core chemicals business. The company is also on an aggressive capital-expenditure expansion to broaden from its heavy-industry base to move into green energy as well as digital and consumer-focused businesses.
Jio is of course a key part of that. While the listing will generate cash and liquidity for its parent, there’s also the likelihood that some investors will shave assets off their Reliance stake if they are buying new positions in Jio.
The offering will take some time for Indian equity markets to absorb. I’ll be watching the first day of trade with great interest and will keep tabs on Jio as it enters life as a listed company.
At the time of publication, McMillan had no positions in any securities mentioned.
