With the start of the bidding window on Wednesday, October 21, the largest IPO in India hardly had time to catch its breath as institutional buyers flocked to it.
According to Reuters, the $3.2 billion IPO of Jio Platforms was oversubscribed in less than two hours of the bidding process, which took place publicly.
It was precisely timed. The IPO worth ₹30,213 crore became oversubscribed in 1 hour 40 minutes of the bidding process.
The majority of the initial demand for the stocks came from big funds. The institutional component was oversubscribed completely in 28 minutes, as per the information provided by NSE. This ratio was at 2.86 by 10 am.
The ratio had increased by late morning. Qualified institutional buyers had bid 3.25 times their quota.
Retail investors were relatively slow to follow. Retail investors had bid 0.23 times their quota till then. The figures of opening day may vary as the issue remains open.
This headline requires further explanation. The IPO was 1.01 times subscribed to by 10:40 am. According to IPO Guru, the average main board IPO was 24.96 times by the close of this year. Therefore, the subscription figure of the morning is just the beginning.
To put it more clearly, 1x means that there was one bidder for each share. However, the subscription does not indicate yet how high the heat will be at the closing of bids.
The figures are massive for any Indian standard. The deal amounts to roughly $3.2 billion and is the largest ever share sale of India.
The firm aims at an assessment of up to $108.3 billion. The range of prices starts at ₹1,065 per share and ends at ₹1,119. The process lasts till Friday.
It beats its predecessor. The offering of Hyundai Motor India was the largest ever IPO in India in October 2024.
The institutional frenzy could be seen two days prior to the opening of the bid to the general public. In what is reported earlier this week, Jio has allocated shares valued at nearly $853 million to both international and Indian investors, which include Abu Dhabi Investment Authority and Blackrock.
The anchor book portion received bids for over $25 billion. As per Storyboard18, the anchor book demand stands at above ₹2.5 lakh crore.
This story is about the origin of Jio as well. The telecom unit of Jio Platforms, headed by the son of Ambani, Akash, started operations in 2016, making a bet on the fact that Indians will consume much more Internet if it were available for almost nothing.
However, the main focus of the business is telecommunication services, with more than 90% of the revenues being made through telecom services. This is important since Jio was perceived as a tech company all along.
The deal comes at an interesting juncture.
It marks a big gauge of investor interest in new stocks at a period when investors have become more critical about investing in companies linked to AI.
This deal also comes amidst the Hindu festival season, which is considered lucky for making purchases, although the Indian markets have been dull lately.
It marks the first IPO for Mukesh Ambani’s Reliance group after 2006.
