“Jio” offers its shares in the largest Indian IPO amid market challenges and competition

On Wednesday, the Indian company “Jio Platforms” begins its initial public offering, in an offering that aims to raise up to $3.2 billion, and is expected to be the largest in the history of India, amid strong interest from institutional investors, despite the slowdown in the Indian stock market and the intensification of competition in the telecommunications sector. The IPO comes as the estimated value of the shares of three Gulf sovereign funds in the company is about $5.6 billion, according to data published by the Global SWF website, which specializes in sovereign funds.

The Saudi Public Investment Fund, along with the Emirati company “Mubadala” and the Abu Dhabi Investment Authority, are retaining their investments in the company with the offering, after the estimated value of the three shares rose from original investments amounting to $3.45 billion in 2020 to about $5.6 billion currently, an increase of approximately 63 percent in dollars, according to the website. This increase represents an estimated increase in the value of shares, and is not profits realized from the sale.

According to published data, the estimated value of the Public Investment Fund’s share increased from $1.5 billion when investing in 2020 to about $2.44 billion now, while the value of the “Mubadala” share increased from $1.2 billion to about $1.95 billion, and the Abu Dhabi Investment Authority’s share from $750 million to about $1.22 billion.

The IPO offers 270 million new shares, at a price ranging between 1,065 and 1,119 Indian rupees per share, with subscription applications continuing to be received from October 21 to 23. At the upper limit of the price, the company's target market value reaches about $108.3 billion, while estimates published by the Financial Times indicate a valuation of approximately $107 billion. This level reflects a decline from initial expectations of more than $150 billion, according to the newspaper.

The company intends to direct most of the proceeds from the offering to reduce the debts of its telecommunications arm, Reliance Jio Infocomm, as it plans to use up to 275 billion rupees (about 2.9 billion dollars) to repay its loans or pay them in advance, while the remaining portion will be allocated to the company’s general purposes. The offering does not include selling shares from current shareholders, but rather issuing new shares.

The subscription was opened to the public and was preceded by receiving requests from major investors, who submitted offers exceeding $25 billion, in exchange for shares allocated to this category worth about $853 million, i.e. more than 30 times the available quantity, according to Reuters. The list of investors who received allocations included the Abu Dhabi Investment Authority, along with BlackRock, Fidelity, and other financial institutions, while the Singapore Investment Authority, the Qatar Investment Authority, and the Bank of Norway Investment Management are participating among the sovereign investors interested in the offering.

High valuation in a tough market

The IPO comes at a time when Jio faces challenges related to the maturity of the Indian telecommunications market and increasing competition, in addition to market pressures on company valuations. According to the Financial Times, the company reduced its target valuation from more than $150 billion to about $107 billion, amid a decline in Indian stocks and some investors preferring other markets in light of the limited Indian companies specializing in artificial intelligence.

The newspaper quoted analysts as saying that the opportunities for growth of the subscriber base have become narrower with the increase in the spread of telecommunications services in India, which makes increasing the average revenue per user a more important factor in the next stage. It also indicated that the shares of the parent company, Reliance Industries, have declined by about 23 percent since the beginning of the year, compared to a 12 percent decline in the Indian Nifty 50 index, in light of the pressures on the refining business linked to disruptions in oil flows and geopolitical tensions.

On the other hand, Jio is betting on the size of its customer base and its expansion in digital services and advanced technologies. The number of its subscribers reached 533 million users by June 2026, making it the third largest telecommunications company in the world in terms of the number of subscribers, according to the newspaper. The company accounts for about 60 percent of data traffic in India, according to Reuters data.

From communications to artificial intelligence

Jio Platforms was founded in 2019 within the Reliance Industries group headed by billionaire Mukesh Ambani, and launched the Reliance Jio communications service in 2016, relying on low prices for data and calls to expand Internet access in India. In 2020, the company attracted international investments, including the “Meta” investment, which gave it a share of approximately 10 percent, and the “Google” investment, which gave it a share of approximately 8 percent.

The group is currently expanding into cloud computing, artificial intelligence, and data centers, and is also seeking to enter Internet services via satellite. The IPO forms part of the reorganization of the Reliance Group's business and plans to transfer leadership to the next generation of the Ambani family, with Akash Ambani assuming leadership of Jio.

The offering puts the company before a double test: the extent to which investors are willing to pay a high valuation for a huge user base and growing technology business, and its ability to convert this size into higher revenues in an increasingly mature and competitive telecommunications market.