The proposed listing of Jio Platforms is set to deliver massive gains for some of the world's largest technology companies, sovereign wealth funds and private equity investors that backed the company during its landmark fund-raising exercise in 2020.
Based on the Draft Red Herring Prospectus (DRHP), Jio plans to raise about $4 billion (around Rs 36,000 crore) through the issuance of 270 million fresh shares, representing 2.9% of the post-issue equity capital.
The numbers imply an issue price of roughly Rs 1,330 per share and a post-listing market capitalisation of nearly Rs 12.5 lakh crore ($140 billion).
At that valuation, the value of holdings of Jio's existing investors would surge substantially, highlighting one of the most successful value-creation stories in India's digital sector.
The biggest beneficiary among non-promoter shareholders would be Meta Platforms. Its investment arm, Jaadhu Holdings LLC, invested ₹Rs 43,574 crore in Jio in 2020 for a 9.99% stake.
At the implied IPO valuation, Meta's current 9.98% stake would be worth nearly Rs 1.2 lakh crore, translating into a gain of about 2.75 times its original investment.
Google International LLC, which invested ₹33,737 crore for a 7.73% stake, would see the value of its holding rise to approximately Rs 93,000 crore, also representing a gain of nearly 2.75 times its original investment.
Among sovereign wealth funds, Abu Dhabi-based Mubadala Investment Company, which invested Rs 9,094 crore, would see the value of its stake rise to about Rs 22,200 crore. The Abu Dhabi Investment Authority (ADIA), which invested Rs 5,683 crore, would see its holding valued at nearly Rs 13,900 crore.
Private equity investor General Atlantic, which invested Rs 6,598 crore, would see the value of its stake increase to roughly Rs 16,100 crore.
Collectively, global technology firms, sovereign wealth funds and private equity investors have invested more than Rs 1.52 lakh crore in Jio Platforms over the years. The investments helped fund the company's digital expansion, strengthen its balance sheet and support one of the world's largest 5G rollouts.
Significantly, none of these investors is using the IPO as an exit route. The issue is structured entirely as a fresh issue of shares, with no offer-for-sale component. As a result, existing shareholders will continue to retain their holdings even as the public issue crystallises substantial gains on paper.
The continued presence of marquee investors such as Meta, Google, Mubadala, ADIA, KKR, Silver Lake and Saudi Arabia's Public Investment Fund is likely to be viewed as a vote of confidence in Jio's long-term ambitions in digital services, artificial intelligence and telecommunications.
For Reliance Industries, which owns 66.43% of Jio Platforms, the implied IPO valuation translates into a stake worth nearly Rs 8 lakh crore, underlining the scale of value creation achieved since Jio opened its doors to external investors six years ago.