Shares of Jio Platforms, Mukesh Ambani's telecoms business, surged 27% on debut in India's biggest listing. The IPO offered relief to a market that has been hit by the war in Iran. Jio had to cut its valuation target to get the deal done.
Jio Platforms shares surged 27% after their Wednesday debut, giving an otherwise downtrodden Indian market its biggest listing. The company raised $3.2bn in an initial public offering that valued it at $108bn.
Wednesday's rise pushed Jio's market capitalization above $130bn, making it India's second-largest listed group after its parent, Reliance Industries.
A listing against a falling market
The debut came during a downturn. The Nifty 50 index has fallen 14% this year as the war in Iran hits India's energy-import-reliant economy. Meanwhile, Reliance shares are down 25% this year.
Jio therefore had to lower its valuation target from $150bn this summer. Even so, bids for the IPO totalled more than $78bn.
According to Nirgunan Tiruchelvam of Alētheia Capital: "The Jio IPO is a vote of confidence in the vast market for data".
Where Jio looks for growth
Jio has more than 530mn subscribers and operates in a near-duopoly with Bharti Airtel, which has 492mn users in India. The company contributes more than a third of Reliance's annual profit.
Because India's telecoms market is saturated, Jio now looks to a wider array of consumer offerings, including AI, and has ambitions to launch satellite broadband services. Analysts at Elara Securities estimated that digital services would contribute only 12% of Jio's revenue this financial year, with sales expected to double by 2030.
Analysts at Motilal Oswal Financial Services also expected Jio to raise subscriber tariffs by about 15% in March.
Source: Financial Times
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