In Mumbai's business circles, the biggest decisions — from product launches to marriages — are often timed to the Indian astrological calendar.
The initial public offering of Mukesh Ambani’s Reliance Jio Platforms seemed to follow the tradition, opening during what is generally considered an auspicious period just ahead of Diwali, one of India’s biggest festivals, which falls on November 8 this year.
Whether it was in the stars or simply down to business fundamentals, the IPO was a runaway hit.
The Jio public offering — the first from Mukesh Ambani's group in 20 years — was the most subscribed public offering in Indian history, drawing $77 billion in bids, my colleague Aditya Kalra reported.
The $3.2 billion IPO closed with subscriptions at over 22 times the total shares on offer, with institutional investors bidding for over 70 times the shares on offer for them. Abu Dhabi Investment Authority, BlackRock and Fidelity were among the big names to invest in Jio's IPO.
Read here for the country's IPOs.
The strong subscriptions could mean that shares in Jio may rally when they list on October 28.
The informal grey market, where unlisted securities trade, is signaling a 22% gain on listing compared to the issue price of 1,119 rupees ($11.76) per share.
"Jio offers a combination of market leadership, healthy earnings growth and future opportunities in broadband, enterprise technology and AI," said Mumbai-based brokerage Motilal Oswal in an October 19 report, putting a 'subscribe' call on the public offering both for listing gains and long-term investment.
At a valuation of 15 times enterprise value to earnings before interest, taxes, depreciation and amortisation (EV/EBITDA), Jio is valued at a premium to industry peers, brokerage Geojit Investments said in an October 21 report.
While this premium valuation may limit near-term upside for the stock, monetisation of new businesses, including cloud and AI services, could emerge as a key driver of earnings growth over the medium to long term, Geojit said, also putting a 'subscribe' rating on the issue.
Catch up on Jio's businesses in this factbox.
The public offering has thrust scion Akash Ambani into the spotlight. Akash has led the IPO discussions, with people telling Reuters reporter Vibhuti Sharma that he is increasingly involved in strategic decisions and investor conversations.
Read more on Akash Ambani in this Reuters Newsmaker.
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