Jio Platforms Ltd. is set to debut on the stock market on Wednesday after a record-breaking initial public offering, pitting billionaire Mukesh Ambani’s telecom giant against a negative trend for India’s mega deals in a challenging market environment.
Jio’s trading debut is the final hurdle for the long-awaited IPO of one of the crown jewels of Ambani’s empire. The listing is a rare opportunity for investors to buy into one of the world’s biggest growth stories of the past decade: Asia’s third-richest person took a major Reliance Industries Ltd. unit public for the first time in almost 20 years.
In the buildup to the deal — lead by the patriarch’s oldest son Akash Ambani — the company’s brass was selling Jio, the telecom and financial services arm of Reliance, as a full-throttle tech giant. In the end, the valuation fell short of some earlier expectations against the backdrop of a selloff in Indian stocks and global equity market volatility. Still, the offering proved popular, raising hopes of a strong debut.
“While a strong listing day gain seems likely, the true test will be how how Akash Ambani and the leadership team sustain that momentum over the long haul,” said Kranthi Bathini, Director of Equity Strategy, at WealthMills Securities. “That long-term value creation will make all the difference.”
Despite the investor demand in the offering and the indications from the unofficial market, history points to a potentially rocky debut as the country’s biggest listings have frequently stumbled out of the gate. The four IPOs that raised at least $2 billion this decade posted a weighted-average decline of 9.9% on their first day, with only one — National Stock Exchange of India Ltd. last month — recording a gain on debut, according to data compiled by Bloomberg.