Google, Meta and PE investors keen to continue in Jio post-IPO to not miss out on India digital play
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The Jio IPO is shaping up as a test of how global technology giants and private-equity investors value India’s next phase of digital growth.
According to investment banking sources, the early investors in Jio Platforms (JPL) are keen to continue in the telco even after the IPO as they don’t want to miss out on India’s digital play.
What Google, Meta, others want from Jio IPO?
For early investors such as Google, Meta and a clutch of global private equity investors, the listing could provide an opportunity to encash their investment, but they prefer to continue with their investment in JPL as they see the expansion of India’s digital economy, two bankers involved in the book-building process pointed out. "Because of their interest in continuing with their stake, the management took the call to issue fresh shares," said a Mumbai-based merchant banker.
The other sources said, the company at one point considered offer-for-sale (OFS) with the early investors divesting their stake. But they dropped the plan as early investors are not keen to exit, they said.
How have Google, Meta investments in Jio Platforms fared?
At an estimated valuation of around ₹12.2 lakh crore, the early investors are already sitting on substantial gains from investments made in JPL in 2020. With Jio positioned at the intersection of telecom, digital services and AI, retaining their stakes could allow these investors to participate in the next leg of digital growth.
Google, which invested ₹33,737 crore for a 7.73% stake in JPL in July 2020, would see the value of its holding rise to about ₹94,500 crore at the estimated valuation. That represents roughly 2.8 times its original investment. Meta, which invested ₹43,574 crore for a 9.99% stake in JPL in 2020, would see its holding valued at approximately ₹1.2 lakh crore, also around 2.8 times its original investment.
Along with the US tech giants, it is joined by a group of global private-equity and sovereign investors, including the Public Investment Fund of Saudi Arabia, KKR, Vista Equity Partners, Silver Lake, Mubadala, General Atlantic, Abu Dhabi Investment Authority and TPG Capital. RIL owns 66.43% of JPL.
When is the Jio IPO expected?
JPL is targeting an IPO of around ₹37,700 crore, potentially making it one of India’s largest public offerings. The issue is expected around the Navratri-Diwali period, with late October or early November emerging as the likely window.
The company has formally advanced the listing process after filing its Draft Red Herring Prospectus (DRHP) with SEBI and receiving the regulatory observation letter. The issue is structured entirely as a 100% fresh book-built offering of up to 27 crore equity shares with a face value of ₹10 each. There is no OFS component, and the issue represents roughly 2.9% of the post-issue equity base.
The primary proceeds are proposed to be used to prepay or repay around ₹27,500 crore of debt held by Reliance Jio Infocomm, JPL’s material telecom subsidiary, along with funding general corporate purposes. The shares are proposed to be listed on both the BSE and NSE.
The issue is being managed by a syndicate of 19 book running lead managers, including Kotak Mahindra Capital, JP Morgan, Morgan Stanley India, BofA Securities, Axis Capital, Citigroup, Goldman Sachs, Jeffries and ICICI Securities, with KFin Technologies as registrar. "The book running lead managers will enter into the underwriting agreement with JPL after the IPO pricing has been determined," said the bankers.
The IPO structure also allows eligible RIL shareholders and company employees to participate through reserved portions before the net offer to the public. Under the applicable regulatory framework, the parent-company shareholder reservation can account for up to 10% of the gross issue size, while the employee reservation is capped at 5% of the post-issue paid-up equity capital. JPL can offer a discount of up to 10% to these reserved categories, subject to the final terms of the prospectus.
The remaining net offer to the public will be divided among qualified institutional buyers, retail investors and non-institutional investors. QIBs will receive at least 50% of the net offer, while retail investors can receive up to 35%, with individual bids capped at ₹2 lakh. NIIs will account for up to 15%, divided between small and large applications.
Up to 60% of the QIB allocation can be allotted to Anchor Investors on a discretionary basis, with one-third of the anchor portion mandatorily reserved for domestic mutual funds. A further 5% of the remaining non-anchor QIB portion is reserved exclusively for domestic mutual funds.
Roadshows next week?
According to sources, Jio is commencing its global investor roadshows next week across key global financial hubs including New York, Boston, London, Singapore, Hong Kong, Dubai and Abu Dhabi. The domestic roadshows in select locations like Mumbai and Ahmedabad are expected closer to RHP filing.
"Roadshow itineraries are organised separately by the BRLMs and the company’s management team during the marketing and pre-IPO phase," said a source in the know.