Jio Platforms Ltd, the digital services division of Reliance Industries, has received crucial Sebi approval to launch an initial public offering that could become India's largest-ever, aiming to raise approximately Rs 37,700 crore.
Key Points
- Jio Platforms has received Sebi's final observation to proceed with its initial public offering (IPO).
- The IPO is expected to raise around Rs 37,700 crore (approximately $4 billion), making it potentially the largest in India's history.
- The company plans to offer up to 27 crore fresh equity shares, representing about 2.9 per cent of its total equity post-issue.
- Proceeds from the IPO will primarily be used for repayment of outstanding borrowings of its subsidiary, Reliance Jio Infocomm Ltd (RJIL), and general corporate purposes.
- Jio Platforms has previously attracted significant investments from global tech giants like Meta and Google, as well as various private equity firms.
Jio Platforms Ltd, the digital services division of Reliance Industries, has received Sebi approval to float an initial public offering that could raise around $4 billion (approximately Rs 37,700 crore), making it potentially the largest IPO in the country.
Jio Platforms had filed its draft papers with the market regulator in June for the proposed public issue.
Sebi's Green Light and IPO Details
According to an update with the market regulator on Friday, Jio Platforms obtained Sebi's final observations on August 28.
Sebi's observation is a key step in the initial public offering (IPO) process, after which a company can proceed with further preparations for the public issue, subject to applicable regulatory requirements.
According to the Draft Red Herring Prospectus (DRHP), Jio Platforms will offer up to 27 crore fresh equity shares.
The issue will account for around 2.9 per cent of the company's total equity base post-issue.
The company is expected to raise around Rs 37,700 crore through the IPO at a valuation of around USD 137 billion, making it the largest IPO in the country's history, sources said.
Comparison and Utilisation of Funds
For comparison, the proposed IPO of the National Stock Exchange (NSE) is estimated to be around Rs 30,000 crore, according to sources.
If Jio Platforms raises the estimated Rs 37,700 crore, its issue would therefore be significantly larger.
The IPO proceeds are proposed to be used primarily for repayment or prepayment, in full or in part, of certain outstanding borrowings of Jio Platforms' material subsidiary, Reliance Jio Infocomm Ltd (RJIL), apart from general corporate purposes.
Investor Interest and Company Background
The proposed IPO will be closely watched by investors and the broader market, given Jio Platforms' scale and prominent investor base.
Jio Platforms has previously attracted some of the world's largest technology and private equity investors.
In 2020, the company raised Rs 43,574 crore from Meta, the promoter of Facebook, for a 9.99 per cent stake. Google invested Rs 33,737 crore for a 7.73 per cent share.
It also raised around Rs 74,745 crore for about a 15.2 per cent stake from a group of global financial and strategic investors, including Silver Lake, Vista Equity Partners, General Atlantic, KKR, Mubadala, ADIA, TPG, L Catterton, PIF, Intel Capital and Qualcomm Ventures.
Reliance Industries currently holds 66.43 per cent of the paid-up equity share capital of Jio Platforms.
Meta and Google together hold 17.71 per cent, with the remaining stake held by other investors.
The IPO would mark the first public offering from the Reliance group since 2008 and the first-ever IPO of a consumer-focused company within the conglomerate.
