Jio Platforms shares surge about 27% in their Indian market debut

what happened

Shares of Jio Platforms, the telecom unit of Reliance Industries, began trading on the National Stock Exchange of India on Wednesday. The stock opened 21% above its issue price and closed near Rs 1,417, a gain of almost 27% on a day when the Nifty index slipped.

Mint's analysis found the debut far stronger than most of India's biggest IPOs: none of the five largest offerings before Jio gained more than 2% on its first day, and three closed below their offer price. Jio's quarterly revenue rose 11.4% year on year to Rs 40,475 crore, and net profit reached Rs 8,389 crore.

Part of the rally was funded with borrowed money. Investors took about Rs 2,227 crore of broker funding, and 93% of the day's increase in NSE's margin book went to this one stock. Reliance Industries shares fell more than 3% over the same session.

why it matters

The structure of demand matters here. A thin free float and leverage make the stock sensitive to swings, and a 5-6% fall could create real margin pressure for borrowers. Jio's return on capital is 10.8% against 19% for Bharti Airtel, so the market appears to value it as a technology story rather than a standard telecom operator. Expected tariff hikes of 12-15% in the second half of the fiscal year will test that valuation.

market impact

Reliance Industries: the subsidiary's valuation weighs on the parent company's shares

• ▼Reliance Industries pressure down — investors stop pricing the full value of Jio into the parent company's shares

tags

instruments