Billionaire Mukesh Ambani’s announcement to launch the much-awaited Jio IPO in 2026, which would be India’s biggest ever at Rs 11-12 lakh crore valuation, could be a double-edged sword for investors as it has triggered a heated debate among the investment community on whether the share sale will unlock value or lead to holding company discount for conglomerate Reliance Industries (RIL).
Although listing is essentially a value unlocking exercise, the IPO route will make RIL a holding company, leading to a discount in valuations which can vary between 5-20% in this case. While global brokerage Citi said Sebi’s new listing rules have dispelled concerns around holding company discount, BNP Paribas has started factoring in a 10% holdco discount for RIL’s stake in Jio Platforms.

Under new IPO rules announced by Sebi last Friday, companies valued over Rs 5 lakh crore now need to shed only 2.5% stake, giving Ambani the optionality to bring down the mammoth IPO size to just about Rs 30,000 crore if valued at Rs 12 lakh crore.

The regulator has also relaxed rules related to minimum public shareholding norms. In case public shareholding is less than 15% as on the date of listing, minimum public shareholding (MPS) of 15% needs to be achieved within 5 years and 25% within 5 years from date of listing.

These two new rules, once they become applicable, will reduce the supply overhang for Jio Platforms upon listing.