Reliance Industries shares rally 3% as Jio IPO details emerge: What is value unlocking and how will investors benefit?

Shares of Reliance Industries (RIL), the oil-to-telecom conglomerate, rallied over 2% in the morning trade on Thursday, October 15, following the unveiling of Reliance Jio's much-awaited IPO details.

The stock jumped as much as 2.97% to ₹1,209.50 on the NSE.

On Wednesday late evening, details emerged that Jio Platforms Ltd, the digital and telecom arm of Reliance Industries, has set a price band of ₹1,065 to ₹1,119 per share for its initial public offering (IPO) that could raise about ₹30,213 crore at the top of the range, making it India's largest.

The IPO committee of Jio Platforms' board approved the band at a meeting on Wednesday, the filing said. Eligible employees bidding in the employee reservation portion will get a discount of ₹54 per share.

Investors must bid for at least 12 shares and in multiples of 12 thereafter. At the cap price, one lot would cost ₹13,428.

According to the draft red herring prospectus (DRHP), the company plans to issue up to 27 crore equity shares with a face value of ₹10 each. At the cap price, that works out to ₹30,213 crore, by calculation. That is about 8% above the record set by Hyundai Motor India, whose ₹27,858.75 crore IPO in 2024 holds the top spot.

What you need to know

The Jio IPO could help unlock value for Reliance Industries (RIL) by giving investors a clearer idea of how much its telecom business is worth as a standalone company.

Currently, Jio's value is reflected within Reliance Industries' overall valuation, which also includes businesses such as retail, oil-to-chemicals, and new energy.

Once Jio lists on the stock exchanges, its share price will provide a market-based valuation of the telecom business.

This could help investors assess whether Reliance Industries' shares are undervalued relative to the combined value of its businesses.

RIL could also benefit if the listing attracts greater investor interest and improves the visibility of Jio's earnings and growth prospects.

However, the IPO does not automatically create additional value for RIL shareholders; the actual benefit will depend on the valuation Jio commands, the stake Reliance retains, and how the market values the parent company after the listing.

Other details to know

Reliance Consumer Products Ltd (RCPL) has entered the ready-to-drink dairy market with the launch of brand 'Joyland' as part of its expansion in the dairy market.

The company has launched Joyland flavoured milk in Tamil Nadu with flavours such as strawberry and vanilla, according to a statement from the FMCG arm of Reliance Industries Ltd (RIL).

The development comes a month after RCPL announced its entry into India's ice cream market with Bombay Creamery.

"The launch extends RCPL's total beverage portfolio, reinforcing its commitment to bringing world-class products to consumers at accessible prices," it said.

Commenting on the development, RCPL Director T Krishnakumar said entry into the ready-to-drink dairy market is a significant step in extending the portfolio and widening the choices.

Reliance Consumer Products Limited (RCPL) is the fast-moving consumer goods (FMCG) arm and subsidiary of Reliance Retail Ventures Limited (RRVL), operating under Reliance Industries Limited (RIL).