Despite its mammoth size, shares of Jio Platforms Ltd, which is set to launch India’s largest IPO on October 21, are attracting strong demand in the grey market. The latest grey market premium (GMP) has surged more than 80% in two weeks to Rs 230 per share, implying a 20.6% premium over the IPO’s upper price band of Rs 1,119.
Jio’s IPO will open for subscription on October 21 and close on October 23. The billionaire Mukesh Ambani-led company has fixed the price band at Rs 1,065–1,119 per share, with the issue expected to raise around Rs 30,213 crore, making it India’s largest IPO.
At present, Hyundai Motor India’s Rs 27,870-crore IPO in 2024 remains the country’s largest public issue, followed by the recently launched Rs 22,569 IPO of National Stock Exchange (NSE). Large IPOs often command a low premium in the grey market owing to the hefty valuation they seek.
At the upper end of its IPO price band of Rs 1,119 per share, Jio is valued at approximately Rs 10.3 lakh crore. The IPO comprises a fresh issue of 27 crore shares and is expected to raise Rs 30,213 crore at the upper end of the price band of Rs 1,065-1,119.
The strong momentum before listing comes as brokerages recommend subscribing to the IPO, citing Jio's dominant position in India's telecom market and its expanding presence in broadband, enterprise connectivity and digital services.
The company delivered Revenue/EBITDA/PAT CAGR of 15.8%/16.2%/18.5%, respectively, during the FY24-FY26 period, with earnings growth outpacing revenue growth due to operating leverage and improving scale, said SBI Securities in a note.
It added that future growth is expected to be supported by tariff rationalisation, migration from 2G to 4G and 5G, higher data consumption, home broadband expansion and increasing enterprise adoption of cloud and digital solutions. L
“The proposed repayment of RJIL’s borrowings is expected to lower leverage and finance costs, strengthen cash flows and provide financial flexibility for future investments. At the upper price band, the issue is valued at a post-issue FY26 P/E multiple of 34.4x and an EV/subscriber multiple of Rs 20,117, reflecting its scale, earnings growth, technology capabilities and long-term monetisation potential,” said SBI Securities.
