Jio IPO vs Reliance shares: Amid a strong response from primary market investors to the Jio Platforms IPO, shares of Reliance Industries Ltd (RIL) saw strong buying interest on Wednesday. Reliance shares finished more than 0.50% higher at ₹1,209, while the Jio Platforms IPO was fully subscribed within an hour of opening for subscription. This might have created confusion in the mind of a retail marginal investor, who has ₹14,000 to invest, an amount that can either be used for the one lot of the Jio IPO or for buying RIL shares.
Jio IPO or RIL shares | Experts weigh in
Pointing towards the difference in between the Jio Platforms and Reliance Industries, Mahesh M Ojha, VP — Research and Business Development at KC Securities, said, “After the value unlock of Jio Platforms from RIL, Reliance Industries would continue to remain the core company of the Reliance Group. So, one should have both shares in one’s portfolio. However, in the case of the availability of a limited amount, I would suggest a long-term investor to go for the Reliance Industries shares, instead of applying for the Jio IPO and waiting for the allocation of shares.”
Advising the long-term investor with ₹14,000 in hand for investing in Reliance Industries shares, Avinash Gorakshkar, Founder of Avinash Mentor Research, said, “The market is expecting the benefit of value unlocking for RIL, as it holds around one-third stake in Reliance Jio Platforms. So, this rally in the RIL shares can be attributed to the Jio Platforms IPO subscription opening.”
Gorakshkar said that even after value unlock from RIL, the balance sheets of these two companies would be connected due to RIL’s strong two-thirds shareholding in Jio Platforms. Good financial performance would continue to be reflected in RIL’s balance sheet.
Jio IPO to fuel Reliance shares
Expecting this value unlock rally to continue further, Avinash Gorakshkar said, “The market is estimating around ₹350 to ₹500 per share rise in RIL shares due to the value unlock. However, much will depend upon the kind of listing Jio Platforms IPO receives.”
“Reliance Industries’ share price today is ₹1209, and it is expected to touch ₹1,550 to ₹1,700 by the end of this financial year. So, my suggestion for the investor is to go for the definite one and buy Reliance Industries shares, because in this choice, the investor won’t have to wait for the share allocation,” said SEBI-registered market expert Anuj Gupta.
“One may say that an investor should go for the IPO option, and in case he or she fails to get Jio shares through the allotment process, then this open market option for the RIL shares can be exercised. But, in this scenario, the investor may have to buy RIL shares at a higher rate as RIL shares are rising on the strong response to the Jio IPO,” Gupta added.
What if the investor has a short-term view?
However, stock market experts maintained that RIL shares are preferable for only those investors who have a long-term view. For a short-term investor having just ₹14,000 in hand, the Jio IPO should be his or her obvious choice as the Jio IPO listing may take place around ₹1350 to ₹1400.
Speaking on the Jio IPO listing price prediction, Avinash Gorakshkar said, “The market is expecting Jio Platforms IPO listing price in the range of ₹1350 to ₹1400, depending upon the market mood.”
So, an investor with ₹14,000 in hand and a short-term view should go for the Jio IPO, as it may increase their money by up to 25% in just one week.
Jio Platforms IPO GMP today
As the grey market premium (GMP) is one of the major indicators of an IPO’s listing price, it is important to see what Jio Platforms’ GMP reflects today.
According to market observers, Jio Platforms’ IPO GMP today is ₹280, ₹20 higher than yesterday’s ₹260. So, the grey market is also signalling a Jio Platforms IPO listing price of around ₹1,399 ( ₹1,119 + ₹280), around 25% higher than the upper price band of the Jio Platforms IPO.
So, the grey market is also hinting at around 25% listing gain on one’s money, if the Jio Platforms share is allotted to an applicant.
Disclaimer: This story is for educational and informational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified financial experts before making any investment decisions.
