Reliance Industries' telecom arm, Jio Platforms Ltd, has officially initiated its much-anticipated initial public offering (IPO) process by filing the Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI). The company stated that the proceeds from the IPO will be primarily used to reduce debt, with the remainder allocated for general corporate purposes.
Debt Repayment Plan
In the DRHP, Jio Platforms outlined its intention to utilize up to Rs 27,500 crore of the net proceeds to prepay borrowings availed by its material subsidiary, Reliance Jio Infocomm Ltd (RJIL). These borrowings are in the form of external commercial borrowings (ECBs) and are subject to foreign currency fluctuations. The company noted that while it employs derivative financial instruments such as interest rate swaps, currency swaps, forwards, and options to mitigate exchange rate risks, there is no assurance that these hedging arrangements will be sufficient to manage fluctuations in foreign currency.
IPO Structure and Shareholding
The IPO comprises a fresh issue of 27 crore equity shares, with no offer for sale (OFS) component. This means that the entire proceeds will go to the company, and no existing shareholders will sell their stakes. Promoter Reliance Industries Ltd (RIL) holds a 66.43% stake in Jio Platforms, while other prominent shareholders include global tech giants Google and Meta.
Mukesh Ambani's Statement
Earlier, speaking at the 49th Annual General Meeting of Reliance Industries, Chairman and Managing Director Mukesh Ambani announced that the board of Jio had approved the DRHP and would file it that day. He described the moment as deeply emotional for himself, the entire Reliance family, and millions of shareholders.
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