Jio Platform IPO: The IPO of Reliance Jio Platform has opened for bids from general investors in the stock market on October 21. This issue has grabbed everyone’s attention as soon as it hit the market. By 10 am, within an hour of the opening of bidding, the entire issue was 83 per cent subscribed. Early trading figures show that large institutional investors have embraced the IPO. However, the environment from the small i.e. retail investors seems to be a little calmer as compared to the big players.
In the first 30 minutes, the dominance of big investors was seen.
Qualified Institutional Buyers i.e. QIB category showed the strongest demand in this major IPO of Jio platform valued at ₹ 30,213 crore. According to the report, when the issue opened in the morning, the entire portion reserved for QIB was 100 per cent subscribed in the first 30 minutes. Even after this, the bidding process by big investors continued at a fast pace. If we look at the data till 10 am, there was 2.86 times more bidding than reserved shares in the QIB category. This figure clearly shows that the participation of institutional investors has been the highest in the total bids in the first hour.
What is the condition of retail investors?
On the one hand, large institutional investors filled their quota almost three times in the first hour, while on the other hand, the initial reaction of retail investors has been slow. Till 10 am, only 13 per cent subscription was recorded in the portion reserved for retail investors. Besides, the situation was similar in the non-institutional investors ie NII category, where 14 per cent bids were received in the first hour.
If we talk about the second reserve category, the atmosphere there looks a little better. As of 10 am, 35 per cent of the shares reserved for Reliance Industries employees have been subscribed. At the same time, 26 percent of the quota reserved for the existing shareholders of the company received bids. It is important to keep in mind here that all these figures are as of 10 am on the first day of the IPO. This subscription condition is subject to change during the bidding period. Investors are now keeping an eye on the pace of subscriptions in other categories, including retail, in the coming trading hours.
IPO does not include OFS
It is important for every investor to know some important things related to this IPO of Jio platform. The IPO is a completely new issue of shares worth ₹30,213 crore. This does not include any part of Offer for Sale i.e. OFS. The company has fixed a price band of ₹1065 to ₹1119 per share for this IPO. A major portion of the proceeds from this issue will be used to reduce the current debt of the company.
Boom in the gray market
Amidst the subscription figures, there is talk of an IPO of the Jio platform in the gray market as well. In the gray market, the premium or GMP of this IPO is said to be ₹268. If we look against the upper price band of ₹1119, it indicates a potential premium of around 24 percent. However, it is important for investors to understand that gray market premiums are completely informal. This is just a guess. GMP never guarantees the actual price quoted on the listing. The actual listing price of the shares will depend on market conditions after completion of the issue as well as investor demand.
