Jio IPO U-Turn: Reliance May Go All-Fresh Issue, Drop Shareholder Exit Plan

India’s biggest telecom IPO may be headed for a major rethink. Reliance Jio is reworking the structure of its proposed initial public offering (IPO) and may shift from the earlier planned offer-for-sale (OFS) route to a fully fresh issue, according to a report by the Economic Times.

The move follows reported differences between existing investors and promoter Reliance Industries over the pricing of the issue.

The report said global technology firms, sovereign wealth funds and private equity investors have been in discussions with the company for more than a month regarding the size and valuation of the IPO. Investors are believed to favour a higher valuation, while Reliance is taking a more cautious approach amid uncertain market conditions and geopolitical tensions in West Asia.

A source told Moneycontrol that investors currently prefer to stay invested in the company rather than seek an exit through the IPO due to market volatility.

Focus on Retail Investors

According to ET, Reliance believes aggressive pricing may create risks for retail investors if the stock witnesses a weak listing. The report cited a person familiar with the discussions as saying there is a conflict between shareholders seeking maximum valuation and the company’s effort to ensure post-listing upside for public investors.

The report further stated that Reliance chairman Mukesh Ambani has consistently maintained that protecting retail investors remains a priority. The company is therefore considering allowing the market to determine valuations after listing, enabling private equity investors to reduce holdings later through open market sales.

Fresh Issue May Cut Valuation

The report added that a fully fresh issue would channel all proceeds directly to the company while proportionally diluting existing shareholders, including Reliance Industries, which currently owns around 67% in Jio.

People cited by ET said nearly ₹25,000 crore from the proceeds could be used to repay debt, with the remaining funds allocated for expansion and operational needs. The revised structure may also reduce Jio’s previously reported valuation range of $133-154 billion.

It further reported that Jio could file draft papers with the Securities and Exchange Board of India within the next one to two weeks, potentially pushing the listing timeline to July.

In 2020, Jio Platforms raised over ₹1.5 lakh crore ($20 billion) from a group of global investors, including Google, Meta, Public Investment Fund, KKR and Silver Lake, in one of India’s biggest fundraising exercises. The capital infusion helped the company turn net debt-free, following which Jio expanded aggressively into 5G, broadband, enterprise solutions and digital services.