Jio IPO GMP hits 20% ahead of October 21 launch
What's the story
The gray market has reacted positively to Jio Platforms' announcement of its initial public offering (IPO) price band and issue size. The stock's gray market premium (GMP) surged to ₹220, indicating a premium of nearly 20% over the upper end of the price band at ₹1,119. Reliance Industries' telecom and digital-services arm had filed its red herring prospectus on October 14, with a price band set between ₹1,065-1,119 per share.
Potential record
Jio Platforms could raise ₹30,213 crore at upper price band
If the upper end of the price band is achieved, Jio Platforms could raise some ₹30,213 crore through a fresh issue of up to 27 crore equity shares. This would make it potentially India's largest-ever IPO.
According to unofficial gray market trackers, Jio Platforms' IPO shares were quoted at ₹1,339, implying a premium of ₹220 per share over the upper price band.
Market response
GMP trend shows growing interest in Jio IPO
The GMP for Jio's IPO has increased from ₹148 on October 4 to ₹220 in the latest reading, after hitting ₹218 on October 13.
This trend indicates sustained interest in the IPO ahead of its launch. However, investors will be keenly watching whether this premium sustains as the issue-opening approaches.
The GMP is an unofficial indicator of investor sentiment toward an IPO based on transactions in the unregulated gray market before shares are listed on stock exchanges.
IPO timeline
Issue opens on October 21, listing expected on October 28
The Jio IPO is a book-built issue of 27 crore equity shares, entirely through a fresh issue.
The public issue will open for subscription on October 21 and close on October 23, with allotment expected to be finalized by October 26.
Shares are tentatively scheduled to list on the NSE and BSE by October 28.
At the upper end of the price band, Jio Platforms is expected to command a valuation of around ₹10.3 lakh crore.
Market impact
Proposed offering could surpass Hyundai Motor India's ₹27,900 crore IPO
The proposed ₹30,213 crore offering would surpass Hyundai Motor India's ₹27,900 crore IPO in 2024. This makes it a potential candidate for India's largest-ever public issue.
The proposed valuation is more than double the equity valuation of around ₹4.91 lakh crore at which most financial and sovereign investors entered Jio in 2020.
Google invested at a lower equity valuation of around ₹4.36 lakh crore.