Jio IPO opens today: Grey market signals 24% upside, but should you subscribe?

Jio Platforms opened its Rs 30,213-crore IPO as the grey market premium reached Rs 273. Religare backed a long-term subscription while cautioning investors about valuation and sectoral risks.

In Short

• IPO price band set at Rs 1,065-1,119; minimum retail lot is 12 shares
• Retail investors need Rs 13,428 for the minimum twelve-share application
• Anchor book drew Rs 2.5 lakh crore demand, exceeding offer thirtyfold

Jio Platforms’ initial public offering (IPO) opens for subscription on Wednesday, October 21, with the grey market premium (GMP) rising to Rs 273, indicating a potential listing gain of 24.4% over the upper end of the issue price band.

According to the latest available grey market data at 7:37 am on October 21, the estimated listing price stands at Rs 1,392 against the IPO’s upper price band of Rs 1,119. At this level, investors could make an indicative gain of Rs 3,276 on a lot of 12 shares, if the stock lists at the estimated price.

However, the grey market premium is unofficial and can change before listing. It does not guarantee the price at which Jio Platforms shares will list or the returns investors will make.

The GMP has risen from Rs 245 on October 19 to Rs 273 on October 20 and remained at that level in the latest update on October 21. It had stood at Rs 250 on October 18 and Rs 235 on October 17, according to the data provided.

JIO PLATFORMS IPO DETAILS

The Rs 30,213-crore IPO will remain open for subscription from October 21 to October 23. The issue is entirely a fresh issue of 27 crore shares, with no offer for sale.

The price band has been fixed at Rs 1,065 to Rs 1,119 per share. The minimum application size for retail investors is 12 shares, requiring an investment of Rs 13,428 at the upper end of the price band.

The allotment is expected to be finalised on October 26, while the shares are scheduled to list on the NSE and BSE on October 28.

The company has already raised around Rs 8,110 crore from anchor investors. Its anchor book attracted demand of around Rs 2.5 lakh crore, exceeding 30 times the amount on offer, with global asset managers, sovereign wealth funds, domestic mutual funds and insurers among those seeking an allocation.

SHOULD YOU SUBSCRIBE TO JIO PLATFORMS IPO?

Religare Broking has assigned a ‘Subscribe – Long Term’ rating to the IPO, citing Jio Platforms’ growth prospects, subscriber base, profitability and opportunities in 5G and digital services.

The brokerage expects rising average revenue per user (ARPU), higher data consumption, customer retention and expanding margins to support revenue growth. It also sees opportunities in enterprise digital services and the international monetisation of the company’s technology platforms.

Jio Platforms’ revenue from operations rose from Rs 1,09,558 crore in FY24 to Rs 1,46,885 crore in FY26. Its earnings before interest, tax, depreciation and amortisation (EBITDA) increased from Rs 54,959 crore to Rs 76,255 crore, while profit after tax rose from Rs 21,423 crore to Rs 30,049 crore over the same period.

The company’s EBITDA margin improved to 51.9% in FY26 and its profit after tax margin reached 20.4%. Net leverage declined to 0.36 times, pointing to a stronger balance sheet, according to the brokerage note.

Religare’s valuation assessment is based on an estimated FY28 enterprise value-to-EBITDA multiple of 11.6 times. It believes the company’s scale, operating performance and growth opportunities support a long-term investment case.

Master Capital Services also highlighted the growth potential of India’s digital economy and Jio Platforms’ presence across mobile connectivity, broadband, digital entertainment, cloud services and enterprise technology.

It said the company could benefit from rising data consumption, broadband adoption, enterprise digitalisation and demand for AI-enabled services.

RISKS INVESTORS SHOULD CONSIDER

Despite the growth outlook, investors should consider the risks before applying.

Religare Broking flagged Jio Platforms’ dependence on Reliance Jio Infocomm for a significant share of its consolidated revenue and profits. Any deterioration in the telecom subsidiary’s operating or financial performance could affect the parent company.

The brokerage also highlighted regulatory dependence on telecom licences and spectrum, competition from satellite-based broadband services, possible disruptions involving telecom tower and optic fibre providers, and changes in net neutrality regulations.

The IPO’s GMP may attract investors hoping for listing gains, but the premium alone is not a basis for an investment decision. Investors should weigh the company’s valuation, financial performance, growth prospects and risks against their investment horizon.

For investors with a long-term outlook, Religare Broking’s recommendation is to subscribe. Those considering the IPO mainly for short-term listing gains should remember that the actual listing price may differ materially from the grey market estimate.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)

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