Anchor investors bid for Jio Platforms on Monday, two days before the public issue opens. Additionally, GMP is upbeat.
Jio Platforms Ltd. opens its initial public offering to anchor investors on Monday, 19 October. These are large institutions, often foreign funds and domestic mutual funds, that commit to buying shares before the issue opens to everyone else. The public issue runs from 21 to 23 October, with listing expected on 28 October.
Jio is selling up to 27 crore new shares at ₹1,065 to ₹1,119 each. At the top of the range, it raises about ₹30,213 crore, the largest IPO in Indian history. The company would be valued at about ₹10.3 lakh crore, or roughly $108 billion.
The anchor book matters
Anchor bids are the first hard evidence of demand. Grey-market premiums and analyst notes are opinions. Anchor investors put real money down, and their allocations are disclosed.
If big names, especially foreign funds, take large chunks at the top of the price band, it signals confidence that will carry into the public issue. A weak or slow anchor book would be a warning.
This matters more than usual because of the backdrop. Foreign investors have pulled about ₹3.12 lakh crore out of Indian shares this year. On Friday they bought for the first time in 15 sessions. Jio’s anchor book will be one of the clearest signs of whether overseas money is willing to come back for the right asset.
What investors are buying
Every rupee raised goes to the company. There is no offer for sale, so no existing shareholder is cashing out. Most of the money will repay borrowings at Reliance Jio Infocomm, the operating telecom company, after years of heavy spending on 5G.
The issue is small relative to Jio’s size. About 2.9% of the company is being sold. That scarcity is a big part of the appeal. Index funds and large investors will need to own Jio after it lists, and there won’t be many shares to go around.
For retail investors, the minimum bid is one lot of 12 shares. There is also a separate reservation for Reliance Industries shareholders: individuals and Hindu undivided families who held Reliance shares on 14 October can apply in that category.
The grey market
Unofficial trading suggests strong demand. The grey-market premium was around ₹221 to ₹225 a share this week, roughly 20% above the upper price band.
That number deserves the usual caution. The grey market is unregulated and thinly traded. The National Stock Exchange’s shares traded at a similar premium before its IPO last month, then listed only ₹15 above the issue price.
Jio’s pricing should help, though. The band values the company at about 33 times last year’s earnings, a discount to Bharti Airtel, which traded at around 42 times when Jio filed its prospectus. New investors are being offered a cheaper price than its closest rival commands.
What to watch this week
Monday: the size and names in the anchor book. Wednesday: the first day of public subscription, especially retail and Reliance shareholder demand. Friday: final subscription numbers.
Markets are closed on Tuesday for Dussehra, which leaves a quiet day between the anchor book and the opening. By Friday, India will know whether its biggest IPO has drawn the crowd everyone expects.
About The Author
