Reliance may offer all new shares in Jio IPO in major U-turn: Report

The u-turn was triggered by some Jio shareholders pushing for a higher price band, while the conglomerate favors a more conservative valuation to avoid listing-day losses for retail investors

Jio is now expected to file the draft prospectus within the next week or fortnight, potentially delaying the listing to July | Image: Bloomberg

Bloomberg

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By Abhishek Vishnoi

Reliance Industries Ltd. is revising its plans for the initial public offering of Jio Platforms Ltd., potentially India’s largest ever, to issue new shares instead of an offering by existing investors, the Economic Times reported, citing unidentified people familiar with the talks.

The u-turn was triggered by some Jio shareholders pushing for a higher price band, while the Mukesh Ambani-led conglomerate favors a more conservative valuation to avoid listing-day losses for retail investors, according to the newspaper.

An IPO comprising entirely freshly issued shares would send all proceeds to Jio, rather than shareholders selling down through an offer for sale. It would also dilute the value of existing shareholdings. Reliance may now let the market set the price after listing, allowing private equity investors to exit later, according to the Economic Times. About 250 billion rupees ($2.65 billion) may go toward debt repayment, it said.

The listing could mark the first public offering by a major Reliance unit in nearly two decades. The company formally kicked off IPO preparations in March, appointing as many as 19 banks to manage the issue. Kotak Mahindra Capital Co., Morgan Stanley, JM Financial Ltd., Goldman Sachs Group Inc., HSBC Holdings Plc, Bank of America Corp. and Citigroup Inc. are among those selected for advisory roles, people familiar with the matter have said.

Jio is now expected to file the draft prospectus within the next week or fortnight, potentially delaying the listing to July, the people told the newspaper. Jio didn’t respond to ET’s request for comment.