MUMBAI: Reliance Jio Platforms is considering an initial public offering (IPO) this year that would float 2.5% of the company, people familiar with the matter say, a move that could make it the country’s largest-ever IPO worth more than US$4bil.
The company, led by Mukesh Ambani, is the parent of India’s largest telecom operator Reliance Jio – with more than 500 million users. Its debut is India’s most highly anticipated IPO this year.
In November, investment bank Jefferies estimated that Reliance Jio’s valuation stood at US$180bil.
At that valuation, a 2.5% stake sale would raise US$4.5bil, dwarfing Hyundai Motor India’s US$3.3bil IPO in 2024.
Over the past six years, Jio has diversified into artificial intelligence (AI) and raised funds from well-known investors including KKR, General Atlantic, Silver Lake and the Abu Dhabi Investment Authority.
Reliance would like to list only 2.5% of Jio’s shares given the large size of the company, the sources said, even though a proposal from India’s market regulator to reduce the minimum size of share sales for large companies seeking IPOs to 2.5% from 5% is awaiting approval from the Finance Ministry.
“The preference is to list 2.5% at this point if the law gets changed as a smaller amount creates more pricing tension,” one of the sources with direct knowledge said, adding that some bankers were pitching a valuation of US$200bil to US$240bil for the business, though Reliance hasn’t decided on a firm number.
Reliance did not respond to Reuters requests for comment.
The sources declined to be named, as they were not authorised to speak publicly.
Typically around 75% to 80% of Jio Platforms annual revenues come from its telecoms business.
It has not been decided if the Jio IPO would be a so-called offer-for-sale, which allows existing shareholders to sell their shares to the public, or if it would also involve the issuance of new stock.
Hyundai’s India IPO, for example, was an offer-for-sale and did not raise new funds.
The Jio listing would add to strong momentum in India’s IPO market over the last couple of years; it ranked as the world’s No. 2 primary equity issuance market last year, raising US$21.6bil as of Dec 18, according to LSEG data. — Reuters
