Jio IPO: Akash Ambani says Rs 30,213 crore issue will push company towards net debt-free status

Jio Platforms is moving towards becoming a net debt-free company as it prepares to use proceeds from its Rs 30,213 crore IPO to repay borrowings, Akash Ambani said on Thursday, outlining a key financial goal for Mukesh Ambani's telecom and digital services business ahead of India's biggest-ever public issue.

Ambani said the company was working towards eliminating its net debt as it prepares for its next phase of growth. "All our IPO proceeds go towards reducing our debt," he said, adding that Jio was "heading to be a net debt-free company."

The comments put debt reduction at the centre of Jio's IPO strategy, as the company looks to strengthen its balance sheet while expanding its telecom network, digital services, cloud infrastructure and artificial intelligence businesses.


According to its offer documents, Jio Platforms has earmarked up to Rs 27,500 crore from the net IPO proceeds to repay or prepay certain outstanding borrowings of its telecom subsidiary, Reliance Jio Infocomm. The proceeds would also provide for general corporate purposes.

Also Read: Reliance Jio IPO: With tech muscle, Akash Ambani makes $1.4 trillion digital economy pitch to investors


The repayment is expected to reduce financing costs and improve Jio's financial flexibility, potentially allowing more of its future operating cash flows to support expansion and investment in technology.

The company has already made progress in reducing borrowings. Its reported net debt fell to about Rs 9,539 crore from Rs 39,036 crore a year earlier, although net debt differs from gross borrowings because it takes cash and liquid investments into account.

Jio's planned IPO is entirely a fresh issue of shares, meaning all the money raised will go to the company rather than existing shareholders. This is a notable feature of the offering, as several of India's largest IPOs have involved existing investors selling their stakes.

Reliance Industries, which holds about 66.4% of Jio Platforms, will not sell shares in the issue. Other major investors, including Meta, Google, Mubadala and Saudi Arabia's Public Investment Fund, are also retaining their holdings.

Akash Ambani pitches Jio's next growth phase

The debt-reduction plan comes as Akash Ambani makes a broader case for Jio's future growth beyond mobile connectivity, presenting the company as a technology platform capable of capturing a sizeable share of India's expanding digital economy.

During his IPO pitch to investors, Ambani said India's digital economy could reach $1.4 trillion by FY31, creating opportunities for Jio across consumer and enterprise technology services.

"We see $1.4 trillion digital economy by FY31. The end-to-end stack gives us the ability to capture a large market share for this," Ambani said.

He also highlighted Jio's technology capabilities, saying the company had filed about 7,200 patents and ranked among the world's top 20 companies in patent filings, making it the only Indian company in that group, according to his remarks.

Ambani said Jio's mission was to connect every Indian home with advanced digital services. He pointed to the scale of its 5G network, describing it as the largest outside China, and said the company's mobile data prices were the lowest globally.

The company has grown rapidly since its commercial launch in 2016, when affordable data plans and free voice services helped transform India's telecom market. Its subscriber base has since crossed 533 million, making it the country's largest telecom operator by users.

Jio is now seeking to expand its earnings through higher average revenue per user, home broadband, enterprise services, cloud computing and AI-based products.

Jio Platforms has fixed the price band for its IPO at Rs 1,065-1,119 per share. The issue comprises up to 27 crore fresh equity shares, with the company expected to raise Rs 28,755 crore at the lower end and Rs 30,213 crore at the upper end.

At the cap price, Jio Platforms would command a valuation of about Rs 10.3 lakh crore, placing it among India's most valuable companies and making its offering larger than Hyundai Motor India's Rs 27,900 crore IPO in 2024.

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.