Jio’s $3.2 billion IPO tests investor appetite as Ambani legacy faces scrutiny

Investing.com -- Reliance Industries’ (NSE) telecom unit Jio Platforms is preparing a $3.2 billion initial public offering, testing investor demand amid growing scrutiny of its valuation and growth prospects.

The offering, scheduled to open on October 21, is expected to become India’s largest IPO, marking a major milestone for billionaire Mukesh Ambani’s business empire.

Jio plans to sell shares at between 1,065 and 1,119 rupees each, valuing the company at approximately $108 billion at the upper end of the range.

That represents a discount to rival Bharti Airtel’s (NSE) market capitalisation of around $125 billion.

The valuation follows questions from institutional investors about Jio’s ability to justify a premium over its competitor and generate additional revenue from digital services beyond telecommunications.

Despite those concerns, the offering has attracted more than $20 billion in bids, with international investors including Fidelity Management & Research, Allianz and Capital Group expressing interest.

Akash Ambani, Jio’s 34-year-old managing director and Mukesh Ambani’s eldest son, is leading the listing.

The transaction comes nearly five decades after Reliance’s landmark 1977 IPO, which helped popularise direct equity ownership among Indian households.

However, India’s investor landscape has changed significantly.

The country now has more than 130 million registered stock market investors, with nearly 40% aged under 30, according to National Stock Exchange data.

Younger investors are increasingly focused on earnings growth, valuations and short-term returns rather than longstanding corporate reputations.

A 2024 study by India’s securities regulator found that retail investors sold 40% of their IPO allocations within a week of listing.

Reliance shares have declined 23% this year, putting the conglomerate on course for its worst annual performance since 2011.

Jio’s market debut will therefore test whether its telecommunications dominance and digital expansion strategy can attract investors seeking sustainable growth rather than relying on the Ambani family’s historical appeal.