Jio shares list at 21% premium: Buy, sell or hold?
What's the story
Jio Platforms made a strong debut on the stock market on Wednesday. The company's shares were listed at ₹1,359 on both BSE and NSE, a 21.36% premium over its IPO price of ₹1,119 per share. The historic IPO was fully subscribed within just 100 minutes of opening and drew over 1.38 crore applications including from retail and first-time investors, more than any other global IPO in history.
Market response
IPO attracted over ₹7 lakh crore
The IPO of Jio Platforms, which was worth around ₹30,200 crore, saw a total subscription of over ₹7 lakh crore during the anchor and public book-building process.
The qualified institutional buyer portion of the issue was subscribed within 10 minutes.
By the end of Day 3, it was subscribed 22.2 times with a staggering aggregate demand against the 27 crore shares on offer standing at 655.68 crore shares.
Investment outlook
Brokerage issues buy recommendations on stock
The stock has received three 'Buy' recommendations on Wednesday.
International brokerage Nomura began coverage with a 'Buy' rating and a target price of ₹1,340, suggesting an upside of 20% from the issue price.
Motilal Oswal also started coverage with a 'Buy' rating and a target price of ₹1,350, an upside of 21% from current levels.
Elara Capital has also given the stock a 'Buy' rating with a target price of ₹1,367 per share.
Future prospects
Listing will likely push Jio Platforms toward steady tariff hikes
Nomura's report highlights Jio Platforms as a scale leader entering the monetization cycle.
The company has about 42% of India's wireless subscribers, 60% of data traffic, and 43% of home broadband.
"In our view, the listing will likely push Jio Platforms (JPL), the price setter, toward steady tariff hikes that peers can follow," said Nomura.
Financial health
Brokerage expects the company's capital expenditure to decline
Jio Platforms' balance sheet is also strengthening with net debt-to-equity, including deferred payment obligations, declining from 0.56 times in FY24 to 0.37 times in FY26.
Nomura expects Jio to become debt-free on a net basis by FY29.
The brokerage also notes that the company's capital expenditure (capex) is expected to decline, falling to around 23% of revenue in FY26 from 35% in FY25 due to most of its 5G investment cycle being behind it.