Jio Platforms is heading towards becoming a net debt-free company as it prepares to use the proceeds from its Rs 30,213-crore initial public offering (IPO) to repay borrowings, Chairman Akash Ambani said on Thursday. The planned debt reduction is expected to strengthen the telecom and digital services company's balance sheet as it enters its next phase of growth.
Speaking at the Jio Platforms IPO press conference, Ambani said the company was moving towards a net debt-free position, with the proceeds from the public issue earmarked for debt reduction. "All our IPO proceeds go towards reducing our debt," Ambani said, adding that Jio was "heading to be a net debt-free company."
Jio Platforms has fixed a price band of Rs 1,065-1,119 per share for its IPO, which will open for subscription on October 21 and close on October 23. At the upper end of the price band, the fresh issue of 27 crore shares will raise Rs 30,213 crore, making it India's largest-ever IPO.
According to the IPO documents, up to Rs 27,500 crore of the net proceeds has been earmarked for repayment or prepayment of outstanding borrowings at Reliance Jio Infocomm, a material subsidiary of Jio Platforms. The remaining proceeds are intended for general corporate purposes.
Unlike several previous large IPOs, Jio's offering consists entirely of fresh shares, with no offer for sale by existing shareholders. The proceeds will therefore accrue to the company rather than Reliance Industries or other existing investors.