Jio's strong market debut boosts confidence in India's IPO pipeline

Jio Platforms Ltd.’s sparkling debut was met with enthusiasm among investors, paving the way for more potential offerings by some of the country’s largest privately held companies.

The massive demand for Jio’s listing showed investors remain willing to commit significant capital to marquee deals, even against a difficult backdrop for Indian equities, according to investment bankers. The stock’s strong post-listing performance may also give prospective issuers greater confidence to press ahead with large transactions, they said.

“Jio’s blockbuster debut has helped restore investor confidence in large-ticket issuances, particularly among retail investors,” said Amrendra Singh, group head of equity capital markets at SBI Capital Markets Ltd. “With a strong pipeline spanning state-owned companies, financial firms and new-age businesses, we expect India’s primary market to remain active, supported by a healthy mix of marquee offerings and disciplined pricing.”

About 113 companies have received regulatory approval to go public in India and another 115 have filed draft paperwork. They include potential billion-dollar deals by some of India’s biggest privately held businesses and the local units of global companies. PhonePe Ltd., Pernod Ricard India Ltd., Hindustan Coca-Cola Beverages Pvt., MakeMyTrip Ltd. and Parle Products Pvt. are considering or preparing for potential India listings. Walmart Inc.-backed Flipkart is also weighing a share sale.

In what could bring about a landmark market event similar to Jio’s blockbuster listing, Tata Sons Pvt., the holding company of the Tata Group, has also faced pressure to list. Billionaire Mukesh Ambani, meanwhile, is also planning to eventually take Reliance Retail Ventures Ltd. public, local media reported.

Jio’s initial public offering raised a record ₹30,200 crore ($3.1 billion) in a deal that was subscribed more than 22 times and attracted $78 billion in bids. Its shares surged 27 per cent on their first day, overtaking Bharti Airtel Ltd. to become India’s second-largest company by market value.

“Jio’s debut as India’s second-most valuable listed company, with a market capitalisation exceeding $100 billion, underscores the growing depth and scale of the country’s capital markets and could encourage more large companies to pursue public listings,” said Raamdeo Agrawal, chairman of Motilal Oswal Financial Services Ltd.

Indian companies have raised about $18.26 billion through IPOs so far this year, putting the market within reach of the record $22.36 billion raised last year.

In addition to Jio, the National Stock Exchange of India Ltd. completed a roughly $2.4 billion IPO, while other major issuers including SBI Funds Management Ltd. and Manipal Health Enterprises Ltd. have also tapped the market.

The ability of investors to absorb those offerings could encourage more companies waiting on the sidelines to accelerate their listing plans, potentially keeping India among the world’s busiest markets for new share sales into 2027.

Part of the reason the Jio deal progressed was a regulatory change that allowed large issuers to dilute as little as 2.5 per cent of their equity. That allows companies that command large valuations to tap the market without overwhelming it.

“Jio was really the first big test for all that, and the test was passed with flying colors,” said Stephen Richard Evans, chairman at Red Lions Capital in Dubai. “I think you’re going to see a lot of other larger groups queuing up to use the same route.”