Jio Platforms Shares Jump More Than 21% in Market Debut After Record IPO

Shares of Jio Platforms climbed 21.5% in their first session of trading on Wednesday, following the biggest initial public offering in India's history. The sale drew strong interest from both institutional and retail investors.

According to NSE data, the company's market capitalization stood at 12.5 trillion rupees, or $131 billion. That makes Jio the second most valuable company in India, behind its parent, Reliance Industries. The valuation also clears the way for its eventual inclusion in key benchmark indices.

Deven Choksey, founder and managing director of wealth management firm DRChoksey FinServ, told CNBC that such inclusion would generate enough demand to shield the share price from any oversupply. He added that some investors who bought into Jio around 2021 may look to exit in about six months. By then, he said, the stock will likely have joined the MSCI index and the Nifty 50.

Jio, India's largest telecom and digital services company, offered 270 million shares at 1,119 rupees each. The sale raised 302 billion rupees, about $3.2 billion, the largest IPO the country has seen.

BSE data showed the offering was subscribed more than 22 times, with institutions driving demand. The qualified institutional portion was subscribed 70.55 times, while retail investors subscribed 2.72 times. Akash Ambani, managing director of Jio Platforms and heir of billionaire Mukesh Ambani, said before the listing that the issue was fully subscribed within 95 minutes of opening on Oct. 21.

Global brokerage Nomura initiated a buy rating on Wednesday with a target price of 1,340 rupees, which implies upside of 19.7% from the IPO price. In a report, the firm said Jio's capital spending cycle is largely complete and that a sharp improvement in free cash flow is expected. Shares were last trading at 1,360 rupees.

Reliance Industries, Mukesh Ambani's flagship company, holds more than 66% of Jio Platforms, according to LSEG data. Jaadhu Holdings, an affiliate of Meta Platforms, owns nearly 10%, while Google International holds 7.7%.

Major global funds including BlackRock, Capital Group and GIC took part in the anchor book, the portion of a fundraise reserved for large institutional investors before public bidding begins. Counting anchor investors, the share offering attracted total demand of $78 billion.