Reliance Jio In Talks With Investors To Sell Stakes Ahead Of IPO Filing

Reliance Jio Platforms, a leading telecommunication firm, has reportedly held discussions with 13 foreign investors regarding the sale of 8% of their individual stakes as part of the proposed IPO in Mumbai, according to a report from Reuters, citing sources with knowledge of the matter.

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Reliance Jio is expected to file draft IPO documents as early as this week, which will be a significant move towards its proposed IPO.

Offer-For-Sale Structure Planned

The proposed IPO is being structured as an offer-for-sale, where existing investors will dilute their holdings rather than the company issuing new shares. According to Reuters, the total stake sale is expected to be in the range of 2.5% to 3% of the company’s equity.

According to the proposed structure, an 8% sale by each investor means a partial divestment of their respective holdings. For example, an investor holding a close to 10% stake will sell less than 1% of the company’s total equity.

Key Global Investors Involved

The investor base in Reliance Jio Platforms includes major global technology and private equity firms as well as sovereign wealth funds. According to Reuters, major shareholders of Snap are Meta, who own a stake of 9.99%, and Google, who own a stake of 7.73%.

Other investors in Snap also include Vista Equity Partners, KKR, and sovereign wealth funds like Public Investment Fund, Mubadala, and Abu Dhabi Investment Authority.

IPO Size And Valuation Estimates

Sources cited by Reuters indicated that the IPO could be valued at up to $4 billion, although final details will be determined closer to the launch. In November, Jefferies had estimated Reliance Jio Platforms’ valuation at about $180 billion.

In 2020, the company had raised more than $20.5 billion through stake sales to global investors.

Listing Preparations Underway

Reliance Jio Platforms has appointed 17 investment banks to manage the proposed listing, according to Reuters. The company is expected to proceed with regulatory filings shortly.

The planned stake dilution by existing investors and the offer-for-sale structure indicate that public investors will be able to participate in the listing through shares offered by current shareholders, with final details on pricing and allocation to be decided at a later stage.