Mukesh Ambani-led Reliance Industries Ltd is likely to roll out the initial public offering (IPO) of its telecom arm Reliance Jio Infocomm, Hindu Business Line reported on Thursday. The estimated size of offer could be around Rs 35,000-40,000 crore, the source-based report added.
The IPO is likely to include a combination of fresh share sale and an offer-for-sale (OFS) from the promoters and existing shareholders of the company. The company may also have a pre-IPO placement clause in its issue. Interestingly, the IPO may hit the street for the second half of the current year, making it the biggest IPO of Indian stock market history.
Reliance Jio may seek a valuation of $120 billion (around Rs 10 lakh crore) as the RIL-backed entity is the central investor in the next-generation technologies, including retail. Brokerages have been giving an estimated valuation of $100 billion (Rs 8.5 lakh crore) to Reliance Jio.
The report, citing sources privy to the matter, added that the preliminary talks for the pre-IPO placement has already started. It is believed that the issue will have ample appetite in the primary market, despite its large issue size. As per the sources cited in the HBL report, bankers believe that issue is unlikely to see difficulties in subscriptions.
The amount of pre-IPO placement will depend on the fresh issue size, while the split between OFS and fresh issue sale is also being decided. However, RIL has remained tight-lipped on the matter thus far. It is said that OFS will give a partial to full exit to many existing investors, indicating a significant proportion for OFS size.
Reliance Jio, which comes under Jio Platforms brags 33 per cent foreign investors. RIL had sold the stakes to global names Abu Dhabi Investment Authority (ADIA), Silver Lake, Mubadala, KKR and others. It raised close to $18 billion in 2020.