Jio IPO: Can India’s biggest-ever issue buck the trend of muted listing gains among mega IPOs?

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The issue has surpassed Hyundai Motor India’s Rs 27,858.75-crore IPO in terms of the amount raised, setting a new benchmark for India’s primary market. For investors who have secured an allotment, the key question is whether Jio can translate strong investor demand into a sizeable listing premium or whether its issue size and valuation could limit the upside.

Mega IPOs: A mixed record on listing day

The historical record of mega IPOs offers a mixed picture. According to the comparison of the 10 largest IPOs by issue size, listing-day gains have varied considerably. Only three companies — LG Electronics India, Coal India and HDB Financial Services — opened at double-digit premiums to their respective issue prices.

LG Electronics India led the group, opening 50.44% above its issue price, followed by Coal India at 17.45% and HDB Financial Services at 12.84%.

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The comparison suggests that a large issue size and strong investor interest do not automatically translate into outsized listing gains. Jio’s debut will therefore test whether its business profile, valuation and demand can set it apart from previous mega offerings.

GMP trends point to strong demand

Grey market indications suggest positive expectations ahead of Jio Platforms’ listing. According to sources tracking unofficial market activity, Jio Platforms shares were quoted at a grey market premium (GMP) of Rs 250 per share over the upper end of the IPO price band of Rs 1,119. This translates into an indicative premium of 22.34%, taking the implied grey market price to Rs 1,369 per share. At the prevailing premium, investors who secure an allotment could potentially see gains of Rs 250 per share. Assuming a lot size of 12 shares, this would translate into an indicative gain of Rs 3,000 per lot.

However, the grey market is unregulated, and the GMP does not guarantee listing-day performance. Premiums can fluctuate before listing, while the actual share price will depend on demand and supply on the stock exchanges.

The subscription figures also reflect strong demand for the offering. The Jio Platforms IPO attracted bids for 4,38,26,15,568 shares against 19,75,25,934 shares on offer, translating into an overall subscription of 22.19 times, according to data from the National Stock Exchange (NSE).

Institutional investors led the demand, with the qualified institutional buyers (QIB) category subscribed 70.55 times by the close of bidding. The non-institutional investor (NII) segment was subscribed 14 times, while the retail individual investor (RII) category received bids equivalent to 2.72 times the shares reserved for it.

Analysts weigh Jio’s chances of bucking the trend

Ratiraj Tibrewal, Director at Choice Capital Advisors, believes Jio’s scale and market position could help it distinguish itself from previous large IPOs, although he cautions against reading too much into subscription figures alone.

"Jio has the scale, market leadership and investor visibility to potentially differentiate itself from previous mega IPOs. However, the size of the issue and its valuation mean that strong subscription demand alone may not translate into outsized listing gains. The listing will ultimately depend on how investors assess its earnings potential and the growth already priced into the issue," Tibrewal said.

Ravi Singh, Chief Research Officer at Master Capital Services Mastertrust, also sees the possibility of Jio breaking the pattern of muted debuts, pointing to the structure of the offering and the strength of investor demand.

"Jio looks better placed than most recent mega IPOs to break the pattern. Hyundai Motor India, LIC and Paytm listed below their respective issue prices, but Jio’s set-up is very different. Its issue is entirely fresh capital, with no promoter selling, and it was subscribed 22.19 times, with qualified institutional buyers bidding 70.55 times their quota," Singh said.

Avinash Gorakshakar, Founder and Head of Research at Avinash Mentor Research Services, similarly believes Jio is structurally positioned to challenge the trend of muted or negative listing performances among large IPOs.

"Jio is structurally positioned to defy the trend of muted or negative debuts, largely because the issue is entirely a fresh issue, with no offer-for-sale component. The capital raised will go towards deleveraging the balance sheet, including the repayment of around Rs 27,500 crore of telecom subsidiary debt," Gorakshakar said.

According to him, the reduction in debt could lower interest expenses and improve the company’s financial profile. He also pointed to Jio’s relative valuation and grey market indicators as factors supporting expectations of a positive listing.

Valuation and debt reduction in focus

While demand has been strong, analysts say the listing performance will also depend on the valuation investors are willing to accept and the company’s ability to improve its financial metrics.

Singh said Jio is valued at around 33 times its post-issue FY26 earnings at the upper end of the price band, compared with approximately 41 times for Bharti Airtel, according to his estimates.

"Valuation is the first test. At the upper band, Jio is priced at around 33 times post-issue FY26 earnings, compared with roughly 41 times for Bharti Airtel. That leaves some room on the table," Singh said.

He also highlighted the proposed use of the proceeds to reduce debt, while noting that substantial deferred spectrum payments remain on the balance sheet.

"The second factor is the balance sheet, with Rs 27,500 crore of the proceeds going towards prepaying debt, or around 39% of reported borrowings, although deferred spectrum dues of around Rs 1.05 lakh crore remain. The broader market mood, FPI flows and how much stock retail and HNI investors sell on day one will also matter a lot," he said.

Gorakshakar similarly cited relative valuation as a factor that could support demand at listing.

"At the upper price band of Rs 1,119, Jio trades at roughly 33.3 times FY26 earnings, which is noticeably cheaper than its primary peer Bharti Airtel at around 39–40 times earnings. This could support demand on listing day," he said.

However, Tibrewal emphasised that valuation comfort and institutional participation will be important in determining how the stock trades once it enters the secondary market.

"Beyond subscription, the key factors will be valuation comfort, institutional investor participation, prevailing market sentiment and demand in the secondary market. Jio’s ability to demonstrate sustainable ARPU growth, stronger cash flows and effective monetisation of its 5G and digital ecosystem will also influence investor appetite. At the issue size, even modest changes in institutional positioning can affect price discovery," Tibrewal said.

What should investors do?

For investors who receive shares in the IPO, the decision to book profits or remain invested will depend on their investment horizon and the valuation at which the stock lists, according to the analysts.

Tibrewal advised against adopting a uniform strategy for all investors, distinguishing between those seeking short-term listing gains and those investing for the longer term.

"The decision should depend on the investor’s investment horizon and the listing valuation rather than a uniform strategy. Investors focused on listing gains may consider partial profit-booking if the stock opens at a substantial premium, while long-term investors can evaluate Jio’s earnings growth, debt reduction and monetisation opportunities. Sustained returns will depend on execution and financial performance, not merely the strength of its market debut," he said.

Singh also suggested a differentiated approach based on investment objectives.

"Those who applied purely for a listing gain can book part of their gains. Long-term investors are better off holding the rest," he said.

He added that investors should monitor return on net worth, which he put at 9.4% for Jio, compared with 20.3% for Bharti Airtel.

Disclosure: This article has been written by Kumar Gaurav, who is not a Sebi-registered Research Analyst or an Investment Adviser. Gaurav and their ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective Sebi-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here