Jio IPO Buzz: Will Reliance Jio Shares List at a Premium?
While turmoil continues in the secondary market, the primary market remains buoyant. Stock markets have been witnessing sharp declines over the past few months due to several factors. Rising fuel prices following the war launched by the US and Israel against Iran, large-scale investment withdrawals by Foreign Institutional Investors (FIIs), disruptions in the IT sector due to the rapid growth of AI, and the prospect of deficient rainfall because of El Niño are among the many factors weighing on the markets. Meanwhile, the primary market continues to maintain its momentum, and there are signs that it could now be reaching its peak. Reliance Industries-owned Jio Platforms Limited (JPL) appears poised to break all existing records in the history of the Indian stock market. One record in particular is already certain to be set by Jio: it is set to become the country's largest-ever Initial Public Offering (IPO). Through its public issue, which opens on October 21, the company aims to raise Rs. 30,213 crore.
The company's share price has been fixed in the range of Rs. 1,065 to Rs. 1,119. The IPO, which opens on Wednesday, will close on Friday, October 23. The shares are scheduled to be listed on the BSE and NSE on October 28. Judging by the response from anchor investors, market circles estimate that the issue opening on Wednesday could receive an overwhelming response. Reliance Jio is currently India's number one telecom company, with a market share of 39 per cent. Bharti Airtel holds the second position. Shares of Bharti Airtel, which is already listed on the stock market, closed at Rs. 1,872 on the BSE on Monday. Against this backdrop, market circles estimate that shares of Reliance Jio, which holds the top position in the telecom sector, could be listed at a substantial premium over the IPO's upper price band of Rs. 1,119. In any case, the prospects appear favourable for Reliance Jio shares to command a higher price than Bharti Airtel shares. There is widespread discussion that investors who receive an allotment of Reliance Jio shares could reap substantial profits.
The company plans to use a major portion of the funds raised through the IPO to repay its debt. This could create scope for the company's profits to increase further in the coming years. With the potential for listing gains as well as attractive returns over the long term, Jio Platforms Limited (JPL) is expected to attract substantial demand from investors. Under the Jio IPO, retail investors will have to apply for a minimum of 13 shares. Shares worth Rs. 2,500 crore have been reserved for shareholders of Reliance Industries. The company will issue a total of 27 crore shares through the IPO. Expectations are running high that the Jio IPO could begin setting new records from the very first day of its opening.
