Nearly 121x profit! HFCL promoter's Rs 10 Jio Platforms bet may yield a Rs 5,800 crore holding

Jio Platforms Ltd (JPL) has formally initiated its initial public offering (IPO) process by filing its Draft Red Herring Prospectus (DRHP) with Sebi, illustrating an around 11,983 per cent valuation leap for one of its earliest domestic backers.

Mahendra Nahata, Founder and Managing Director of HFCL, is sitting on an approximate 121-fold return on an initial block of shares acquired at just Rs 10 each.

The draft prospectus reveals that the proposed IPO will consist entirely of a fresh issue of up to 270 million equity shares (face value of Rs 10 each) to raise capital directly for the company, with no Offer-for-Sale (OFS) component from existing shareholders. As of now, no investor, including Nahata, plans to sell shares in the upcoming public issue.

Motilal Oswal has valued the telecom and digital giant at an overall equity value of Rs 10.7 lakh crore. Going by that, Nahata's cumulative 0.54 per cent holding, acquired for a total of Rs 47.87 crore in 2020, is now worth nearly Rs 5,800 crore.

Jio plans to deploy Rs 27,500 crore of the issue proceeds to prepay borrowings at Reliance Jio Infocomm, its core telecom subsidiary, with the remainder earmarked for general corporate purposes.

Reliance Industries Ltd (RIL) retains firm control with a 66.43 per cent stake. Among external investors, Meta affiliate Jaadhu Holdings is the largest with a 9.98 per cent stake, followed by Google International LLC at 7.73 per cent. Meta and Google received shares at Rs 488.34 each.

Separately, Mukesh Ambani-led Reliance Industries Ltd (RIL) could account for nearly 7 per cent of the total market capitalisation (m-cap) of companies listed on BSE following the proposed initial public offering (IPO) of its telecom and digital services arm, Jio Platforms, according to a report by The Economic Times.

The report said RIL's share of the BSE's total market value could rise from the current level of under 4 per cent, reflecting a significant value-unlocking opportunity for investors.

According to ET, if Jio Platforms lists at the higher end of the expected valuation range, the RIL group could host India's two most valuable listed companies. Reliance Industries currently commands a m-cap of around Rs 17.7 lakh crore, while Jio Platforms is estimated to debut with an m-cap of nearly Rs 14 lakh crore.

In such a scenario, HDFC Bank, Bharti Airtel and ICICI Bank -- currently valued at about Rs 12 lakh crore, Rs 11.6 lakh crore and Rs 9.7 lakh crore, respectively -- would follow in the market-cap rankings, the report noted.

The combined market value of RIL and Jio Platforms is projected to be around Rs 32 lakh crore.