Reliance Industries is taking a different route with Reliance Jio's Rs 30,213 crore IPO, choosing to raise the entire amount through fresh equity rather than allowing existing shareholders to cash out. The decision stands out in a market where several of India's biggest public offerings have been dominated by offers for sale (OFS).

The fresh issue, which will be a record for domestic public markets, comes against a mixed performance of recent mega IPOs. While some delivered strong listing gains, several have struggled to hold those returns.

An analysis of six large IPOs shows that four delivered positive listing returns, but only two were trading above their issue prices as of October 15, with one nearly unchanged. HDB Financial Services, which raised Rs 12,500 crore through a combination of a Rs 2,500 crore fresh issue and a Rs 10,000 crore OFS by HDFC Bank, listed at a 13% premium. The stock has since fallen 28% below its issue price.

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SBI Funds Management, which came to the market through a complete OFS, delivered 7% listing gains but is now down 10% from its issue price. The National Stock Exchange's OFS IPO opened at a 1% premium and is trading almost flat, down 0.1%.

The experience of other large issues has been equally varied. Hyundai Motor India, another entirely OFS issue, listed at a 1% discount and is now up just 1%. Life Insurance Corp listed 8% below its issue price and remains down 17%, even after adjusting for its subsequent bonus issue.

LG Electronics India has been the standout performer. Its entirely OFS IPO delivered a 50% listing gain, and the stock has retained most of that momentum, trading 51% above its issue price.

Why Jio's fresh issue matters

Unlike these offerings, Jio Platforms is issuing only new shares. Reliance Industries, which owns about 66.4% of the company, is retaining its stake, as are major outside investors including Meta, Google and several global private equity and sovereign wealth funds.

Paresh Bhagat, Chairman of Mangal Keshav Financial Services, believes this is a positive differentiator.

"In an OFS, proceeds go to existing shareholders, whereas a fresh issue brings capital directly into the company," he said, adding that the absence of promoter selling could strengthen investor confidence.

Jio plans to use approximately Rs 27,500 crore of its IPO proceeds to prepay borrowings at Reliance Jio Infocomm, reducing interest costs and strengthening its balance sheet.

Akash Ambani recently said Jio was heading towards becoming a net debt-free company, with IPO proceeds helping repay existing borrowings.

However, the financial benefit may be smaller than the size of the offering suggests.

Balaji Rao Mudili, Research Analyst at Bonanza, said Jio's reported net debt of Rs 27,579 crore as of March 2026 could fall to roughly zero after repayment. That calculation, however, excludes Rs 1,04,514 crore of deferred spectrum payments owed to the Department of Telecommunications.

Including those obligations, Mudili estimates that Jio would still carry debt-like liabilities equivalent to about 1.4 times FY26 EBITDA.

The planned Rs 27,500 crore repayment is also less than 3% of Jio's proposed Rs 10.3 lakh crore valuation. The company generated EBITDA of Rs 76,255 crore and profit of Rs 30,049 crore in FY26.

"The fresh issue structure helps the IPO's story and sentiment, but its direct effect on Jio's fundamentals is small," Mudili said.

He noted that issuing new shares would dilute earnings per share by about 2.9%, although interest savings from debt repayment could offset part or potentially all of that effect.

The selling pressure may come later

Another important difference between a fresh issue and an OFS is the timing of share sales by existing investors.

Jio's financial investors, including entities associated with Saudi Arabia's Public Investment Fund, KKR, Vista Equity Partners, Silver Lake, Mubadala, General Atlantic, ADIA and TPG, are expected to collectively hold about 14-15% after the IPO, excluding Meta and Google.

At the upper price band, that stake would be worth roughly five times the IPO size.

Mudili said many of these shares would generally remain subject to a six-month post-allotment lock-in, creating the possibility of additional supply around late April 2027 if investors decide to sell.

"The bigger point is that it does not remove the selling pressure that OFS issues release at listing. It postpones it," he said.

The possibility of future exits does not necessarily mean those investors will sell. However, prospective shareholders will have to consider the potential increase in freely tradable shares when evaluating medium-term returns.

Dr Ravi Singh, Chief Research Officer at Master Capital Services, said fresh issues can be more favourable for long-term investors when the proceeds support debt reduction, expansion or new investments.

"For Jio, a fresh issue could improve investor appetite if capital is deployed productively. However, medium-term returns will ultimately depend on valuation, earnings growth, cash-flow generation and execution, rather than the issue structure alone," he said.

Jio Platforms has fixed its IPO price band at Rs 1,065-1,119 per share, with the offering of 27 crore fresh equity shares expected to raise as much as Rs 30,213 crore at the upper end. The issue will open for subscription on October 21 and close on October 23. Anchor investor bidding is scheduled for October 19, while the shares are expected to list on October 28.

At the cap price, Jio would command a valuation of about Rs 10.3 lakh crore, making it one of India's most valuable listed companies.

Disclosure: This article has been written by Podishetti Akash, who is not a SEBI-registered Research Analyst or an Investment Adviser. Podishetti Akash and his ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclosures here.