SEBI has sought clarification from Jio Platforms on the IPO filing

Capital markets regulator Sebi has sought clarification from Jio Platforms on its draft red herring prospectus (DRHP), marking the next step in the regulatory review process for what is expected to be one of India’s largest initial public offerings.

Sebi’s observations come after Jio Platforms filed its draft papers for a proposed IPO that involves an entirely fresh issue of up to 27 crore equity shares with no offer-for-sale (OFS) component. The company is about Rs. 35,000 crore, making it the largest public issue in the history of India’s capital market.

As part of the review process, SEBI usually seeks additional information or clarifications from issuers before issuing its final observations, which are required for companies to proceed with IPOs.

Unlike many recent mega listings that allow existing shareholders to monetize their investments, Jio’s proposed IPO is structured as an entirely new issue. This means that income will flow directly to the company rather than being sold to shareholders.

According to the draft prospectus, the Jio IPO proceeds will be used for debt repayment or prepayment of Rs. 27,500 crore is planned to be deposited. The rest of the funds will be used for investments in network expansion, artificial intelligence infrastructure, digital services and other corporate purposes.

Reliance Industries Chairman Mukesh Ambani while announcing the IPO at Reliance Industries’ annual general meeting termed the proposed listing as the group’s most important value-creation milestone this year. He said the listing will unlock value for Reliance shareholders while providing investors with an opportunity to participate in the growth of India’s largest digital services company.

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Jio Platforms counts several marquee global investors among its shareholders, including Google, Meta, KKR, Silver Lake, Vista Equity Partners, General Atlantic, Abu Dhabi Investment Authority and Public Investment Fund of Saudi Arabia. Reliance Industries currently owns 67% of the Jio platform.

The IPO is also expected to provide the market with an independent valuation of Jio’s telecom and digital businesses, which have so far been embedded in the Reliance Industries conglomerate structure.

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