Meta- and Google-backed Jio Platforms’ shares soar over 21% on trading debut after record IPO

Key points

• Jio Platforms shares rose 21.5% on their trading debut Wednesday after India's largest-ever IPO.
• The company's market capitalization reached 12.5 trillion rupees ($131 billion), making it India's second most valued company after Reliance Industries.
• Nomura gave Jio Platforms a buy rating with a target price of 1,340 rupees, about 19.7% above the IPO price.

Jio Platforms shares climbed 21.5% on their trading debut Wednesday, following a record initial public offering. The company's market capitalization reached 12.5 trillion rupees ($131 billion), according to NSE data, making it the second most valued company in India after its parent, Reliance Industries.

The IPO offered 270 million shares at 1,119 rupees each, raising 302 billion rupees ($3.2 billion) in India's largest-ever listing. Including anchor investors, demand for the offering reached $78 billion.

Index inclusion expected

Deven Choksey, founder and managing director at DRChoksey FinServ, told CNBC that eventual inclusion in key benchmark indices will generate sufficient demand and protect the share price from oversupply. He said some investors who bought stakes in Jio around 2021 may look to exit in about six months, by which time the stock will likely be included in the MSCI index and the Nifty 50.

That inclusion will generate sufficient demand and protect the share price from any oversupply

— Deven Choksey

Ownership and analyst view

Reliance Industries owns more than 66% of Jio Platforms, LSEG data shows. Meta Platforms affiliate Jaadhu Holdings holds nearly 10%, and Google International owns 7.7%.

Nomura gave Jio Platforms a buy rating on Wednesday with a target price of 1,340 rupees, implying 19.7% upside to the IPO price. The brokerage said in a report that Jio's capex cycle is largely over and it expects a sharp improvement in free cash flow.