Jio’s Record IPO Raises Big Questions About Debt, Ownership and Reliance Shareholders

India’s biggest initial public offering (IPO) is set to bring Jio Platforms to the stock market, but the offer raises important questions for both new investors and existing Reliance Industries shareholders. The proposed issue of around ₹30,213 crore, expected to open on October 21, 2026, would value Jio Platforms at about ₹10.3 lakh crore. The company has more than 524 million customers and its listing has long been seen as a way to unlock value for Reliance.

However, the use of the IPO money, the absence of share sales by existing investors and the future of Reliance Industries’ stock are among the issues that investors will need to examine.

Most of the IPO Money Will Go Towards Debt

According to reported details of the offer document, up to ₹27,500 crore from the IPO will be used to repay or prepay borrowings of Reliance Jio Infocomm. This is more than 90% of the total issue. The remaining money will be used for general corporate purposes.

The offer does not set aside a specific amount for new spectrum or the company’s artificial intelligence plans, despite these being important parts of Reliance’s wider business plans.

Jio reported total borrowings of ₹70,781 crore as of March 2026. Even after the IPO proceeds are used, more than ₹43,000 crore of debt will remain. This means the offer will mainly help reduce existing debt rather than directly fund new projects.

Using IPO proceeds to repay debt is not illegal or unusual. However, investors need a clear picture of how their money will be used.

Why Are Existing Investors Not Selling Shares?

The proposed IPO is entirely a fresh issue of shares, with no offer-for-sale component. This means the money raised will go to the company rather than to existing shareholders selling their holdings.

Reliance Industries, which owns around 66% of Jio Platforms, is not selling shares through the offer. According to current reports, neither are Meta, Google or the global investment funds that invested in Jio in 2020.

The absence of share sales by early investors raises questions about their plans. Investors may want to know why none of the existing backers are selling at this valuation and when their shareholding lock-in periods will end. Once these restrictions expire, more shares could become available in the market.

A Small Portion of the Company Will Be Listed

At the upper end of the price band, the IPO represents less than 3% of Jio Platforms. With such a small portion of the company available for public trading, the share price after listing could be affected by limited supply and buying by index funds, rather than only by the company’s business value.

The company may also need to bring more shares into public hands over time to meet minimum public shareholding rules. This could create additional selling pressure in the future.

Questions Over the Jio Brand and Group Deals

Another issue concerns the ownership and use of the Jio name. Brokerage reports analysing the offer document have noted that the Jio trademark is held centrally within the Reliance Group and that Jio Platforms does not control how other group companies use it.

Businesses such as JioMart and Jio Financial also use the Jio name. This raises questions about how the brand is managed and whether problems at another group company could affect Jio Platforms’ reputation after listing.

Investors may want clarity on who controls the trademark, whether Jio Platforms pays to use it and whether such charges could be introduced or increased in the future.

Related-party transactions are another area to watch. Jio depends on the wider Reliance Group, including Reliance Retail, for the distribution and sale of its services. Since the promoter has interests on both sides of such arrangements, independent directors would need to ensure that the terms are fair. Regular details of these transactions would also help investors understand the business relationship.

Reliance Shareholders Are Still Waiting for Better Returns

Jio’s IPO also brings attention to the performance of Reliance Industries shares. On October 14, RIL shares closed at around ₹1,176, more than 25% below their 52-week high of ₹1,611.80. The stock had also reached fresh 52-week lows in recent weeks.

Over the past three years, the share price has shown little overall movement. The dividend yield is around 0.5%.

The company’s return on capital has also raised questions. Data from Screener.in show that Reliance Industries’ consolidated return on capital employed was around 10% in FY26, close to the level seen about a decade ago. This suggests that, despite years of large investments, the company’s return on each rupee of capital has remained at a similar level.

There is also the question of listing timelines. At the 2019 annual general meeting, Mukesh Ambani said Reliance aimed to list Jio and Reliance Retail within five years. Jio is now expected to list in late 2026, while Reliance Retail is reportedly considering a listing around 2028. The delays have meant that shareholders have had to wait longer for the value they were promised.

Could Jio’s Listing Affect Reliance’s Share Price?

Once Jio Platforms is listed separately, investors who want exposure to Jio will be able to buy its shares directly. Some analysts have warned that Reliance Industries could then trade at a holding-company discount, with estimates of around 25% being discussed.

This creates a possible problem for existing RIL shareholders. They already have indirect exposure to Jio through their Reliance Industries shares. A demerger could have given them direct shares in Jio, but under the proposed IPO structure, new shares will go to new investors and most of the money will be used to repay debt.

This raises a question: was a demerger considered, and if so, why was it not chosen?

There is also the question of the IPO valuation. Several brokerages had discussed valuations above ₹10.3 lakh crore. If the issue price is set below what the market later considers the company’s worth, new investors could benefit from the difference. Existing Reliance shareholders may then question whether the IPO gives them the best possible value.

A Strong Business, but Questions Remain

Jio’s financial performance provides a strong part of the case for the IPO. The company reported revenue of ₹1,46,885 crore and net profit of ₹30,049 crore in FY26. It is a profitable market leader, and its debt levels have come down.

Supporters of Reliance Industries also point out that the wider market has faced a difficult 2026 and that the company’s capital spending is expected to peak.

However, strong financial results do not remove questions about company control, related-party deals, the use of the brand or the returns earned by shareholders.

As the IPO moves forward, investors will want clear answers on when shareholders can expect better returns, what return on capital the group aims to achieve and by when. They may also seek clarity on how Reliance will decide which new businesses, including artificial intelligence, data centres and satellite broadband, will be placed within Jio and which will remain elsewhere in the group.

Another important question is how the next generation of leadership will be judged: by the size of the business empire or by the returns it delivers.

Jio’s IPO could become a major event for India’s capital markets. But its size alone will not answer these questions. Investors will need clear figures, timelines and information about how the company plans to use the money it raises.