Jio Platforms IPO: How Reliance, Meta, Google and other investors’ stakes will change post the offer

ETMarkets.com

The fresh issue of 27 crore equity shares will also bring a change in the shareholding pattern, diluting the percentage stakes of existing investors even as the number of shares they hold remains unchanged.

According to data from the red herring prospectus (RHP), Reliance Industries’ stake in its subsidiary will decline from 66.35% to 64.41% after the IPO. However, its total shareholding will remain unchanged at around 593.7 crore shares.

The same dilution will apply to other existing investors. Meta Platforms’ affiliate Jaadhu Holdings will see its stake fall to 9.68%, while its shareholding will remain unchanged at around 89.2 crore shares.

Google International’s stake will stand at 7.49%, followed by the Public Investment Fund and KKR subsidiary Omicron at 2.24% each. SLP Redwood will hold 1.83%, while Mubadala Investment’s MIC Redwood will have a 1.80% stake.

General Atlantic’s stake will decline to 1.30%, followed by Abu Dhabi Investment Authority at 1.12% and TPG Capital at 0.90%.

The key distinction is that the lower percentage stakes do not indicate that these investors have sold shares. Instead, the fresh issue will expand Jio Platforms’ total equity base, reducing the proportion of the company owned by existing shareholders even though their individual share counts remain unchanged.

Jio IPO details

The proposed IPO valuation places Jio Platforms at a premium to the levels at which most of its major private investors entered in 2020. Several financial and sovereign investors invested at an equity valuation of around Rs 4.91 lakh crore, while Google's investment was made at a lower valuation of about Rs 4.36 lakh crore. The IPO valuation is therefore more than double the level at which most outside investors initially invested in the company.

At the upper end of the price band, Jio Platforms is expected to be valued at around Rs 10.3 lakh crore, potentially making it India's most valuable listed companies at the time of its market debut. The Rs 30,213 crore offering would also overtake Hyundai Motor India's 2024 IPO, valued at Rs 27,870 crore, as the country's largest public issue.

Jio Platforms houses Reliance’s digital and telecom businesses, including mobile services, broadband, cloud, entertainment, enterprise technology and artificial intelligence-linked platforms. The IPO is being pitched as more than a telecom listing, with the company seeking to position itself as a broader consumer technology and digital infrastructure play.

For Reliance Industries, the IPO will create an independent market value for its biggest growth asset. RIL owns about two-thirds of Jio Platforms, and investors have long viewed a separate Jio listing as a key value-discovery event for the conglomerate.