Primary drivers: Mega IPOs could boost interest in Indian markets

Jio Platforms and NSE are set to launch record-breaking IPOs, offering investors exposure to two vastly different but dominant growth stories

Two mega issues are due to hit the Indian primary market soon, with two market leaders filing their respective draft red herring prospectuses last week. Jio Platforms could raise about ₹37,700 crore, while the National Stock Exchange (NSE) might mop up around ₹30,000 crore, becoming the biggest initial public offerings (IPOs) thus far. Hyundai Motor India had raised ₹27,870 crore in 2024. While the offer bands are not known, both issues are expected to receive a positive response from investors. However, apart from size, there is little in common between the two; indeed, the underlying businesses are radically different. Investors will apply entirely different valuation criteria when judging the future prospects of the two businesses. The NSE is India’s premier exchange, generating over 90 per cent of cash equity trades by value and the bulk of the derivative volumes. India has the world’s largest derivatives market by contract volume and one of the world’s biggest equity markets. Indian households also have considerably lower exposure to the equity market. This will provide growth opportunities as penetration increases. 

The NSE is cash-rich, with its turnover growing steadily at over 18 per cent. It has a zero-debt balance sheet, and over ₹17,000 crore of cash reserves. It reported a profit after tax (PAT) of over ₹10,300 crore in 2025-26, achieving a net margin of 63 per cent and distributing ₹8,660 crore as dividend. The high payout is prompted by regulations that prevent exchanges from investing in risky assets. Investors can expect to enjoy similar dividend payouts unless regulations are relaxed to allow the NSE to invest in a wider pool of assets. The IPO is entirely an offer for sale (OFS) with multiple institutions selling small portions of their holdings. The NSE has been seeking to list for many years but has been held back by legal and regulatory concerns. The IPO will unlock value. The smaller BSE (which is, however, growing faster) trades at a trailing price-to-earnings (PE) ratio of 67. The NSE could be valued at comparable multiples. 

The Jio Platforms IPO comprises a fresh issue of up to 270 million equity shares (2.9 per cent of post-issue equity capital). About ₹27,500 crore of the IPO proceeds  will be utilised to prepay or repay borrowings. Jio leads the telecom-services segment in revenue share.  The Jio management aims to migrate all subscribers to 5G by 2030 while advancing India’s leadership position in 6G. It also aims to provide high-speed home broadband (HBB) in every part of India through JioAirFiber by continuing its fibre rollout. This will enable it to digitise Indian enterprises and small businesses on a large scale and make artificial intelligence (AI) accessible to all. Jio might also enter the satellite broadband market and is setting up massive AI data-centre capacity to take India’s deeptech capabilities global. Reliance will continue to hold about a 66 per cent stake in Jio after the IPO. Recent guidance indicates a target of doubling operating profits in the next five years. 

There’s obviously a growth story here. The issue proceeds will not only ease the debt burden but also help fund the considerable investment required to maintain growth momentum. A listing unlocks value because it allows investors to buy into the fast-growing, hightech digital economy without being compelled to also invest in a petrochemicals and energy conglomerate. The past 18 months have seen foreign portfolio investors steadily cutting exposure to India. It remains to be seen how investors respond to these mega listings and when the issues hit the market. These IPOs could possibly spark a resurgence of interest in Indian equities.