Jio IPO Is Likely to Open on October 21: Most of the Money Will Repay Debt, Not Fund Growth

Jio Platforms IPO is likely to open on October 21 and aims to raise around ₹35,000 crore, as per media reports. Shares are expected to list on October 28. If these plans go ahead, Jio's IPO could become India's largest public issue.

But the size of the IPO is not the most important thing for investors. A more useful question is: Where will the money go?

According to the DRHP, most of the IPO proceeds will be used to repay debt rather than fund a new expansion. That is important because it tells us what this IPO is really doing for the business.

Where Will the ₹27,500 Crore Go?

Jio's IPO is a fresh issue, with up to 27 crore new shares and no Offer for Sale (OFS).

The DRHP says up to ₹27,500 crore of the IPO proceeds will be used to repay borrowings of Reliance Jio Infocomm, Jio Platforms' telecom subsidiary. The remaining amount will be used for general corporate purposes.

If that size remains unchanged, roughly three-fourths of the issue proceeds would go towards debt repayment.

Think of it like a family receiving a large bonus and using most of it to repay a home loan. The family's financial burden comes down, but the money does not build another room in the house.

Jio's IPO works in a similar way. A large part of the money raised will reduce existing debt rather than directly fund new towers, fibre networks or AI infrastructure.

Why Is a Profitable Company Raising Money to Repay Debt?

This is the obvious question.

Jio Platforms reported a net profit of ₹30,049 crore in FY26, with an EBITDA margin of 51.91%. The planned ₹27,500 crore debt repayment is therefore roughly equivalent to one year's profit.

But profit is not the same as cash sitting in the bank.

Telecom is a capital-intensive business. Jio needs to keep spending on areas such as spectrum, network upgrades, 5G and fibre. A significant part of the cash generated by the business can therefore go back into the business.

One way to look at the IPO is that it allows Jio to reduce existing borrowings without necessarily taking the same money away from its ongoing investments.

However, this is an interpretation of the transaction, not a stated reason from the company.

What Does Lower Debt Change?

Repaying debt can still be useful for Jio, even if it does not directly create new revenue.

• Lower interest costs: With less debt, the company may have lower interest payments, which can support profits.
• A stronger balance sheet: Lower borrowings can make the business financially stronger and give it more room to invest in the future.
• More flexibility: A company with less debt has less dependence on lenders when it needs to make large investments.

But there is an important limitation. Lower debt does not automatically create growth.

Jio will still need to grow its operating business. That means increasing average revenue per user (ARPU), monetising 5G, expanding home broadband and building newer businesses such as enterprise, cloud and AI.

Jio's FY26 ARPU was ₹214. So, for investors, the bigger question is not simply whether debt falls after the IPO. It is whether the business can continue increasing the amount it earns from its large customer base.

What Are Investors Actually Paying For?

The IPO is mainly being used to reduce Jio's debt, not to fund a large new expansion project.

But when you buy Jio IPO shares, you are not buying a share of the ₹27,500 crore being used for debt repayment. You are buying a stake in Jio Platforms, its telecom, digital and other businesses, at the IPO price.

The debt repayment should make Jio's balance sheet stronger. But that does not automatically make the IPO a good investment.

The key question is: how much are investors being asked to pay for Jio's business after taking this stronger balance sheet into account?

Media reports, citing banking sources, have put Jio's expected enterprise valuation at around $143 billion-$146 billion, or more than ₹12 lakh crore. These figures are unofficial and should not be treated as the final IPO valuation.

So, the important point is simple: a stronger balance sheet is positive, but investors still need to see whether the IPO price is reasonable for the business they are buying.

What Will Decide Whether the IPO Is Attractive?

The bigger question is whether the price being asked is reasonable for the business and its future growth.

The Red Herring Prospectus (RHP), which contains the final details of the IPO before listing, will help investors answer some of these questions:

• What is the IPO price and valuation? How much are investors being asked to pay for Jio?
• How much will Jio continue to spend? The company will still need to invest in areas such as 5G, spectrum and broadband.
• Can ARPU keep growing? Higher revenue per user will be important if subscriber growth slows.
• Can newer businesses scale? Enterprise, cloud and AI could become important growth drivers, but investors need to see how meaningful they can become.

These factors will help investors move beyond the headline size of the IPO and judge what they are actually paying for and whether the valuation leaves enough room for future growth.

The Bottom Line

The headline story is that Jio could launch one of India's biggest IPOs. But the more important question is what investors are actually paying for.

A large part of the IPO proceeds is intended to repay debt at Reliance Jio Infocomm. This can strengthen Jio's balance sheet and reduce its financial burden, but it does not directly create a new growth engine.

For retail investors, the key questions are:

• At what valuation is Jio being offered?
• Can its future growth justify that valuation?
• Can ARPU, 5G, broadband and newer digital businesses continue to drive growth?

The final price band and RHP should give investors a clearer picture of the valuation and the business they are being asked to buy.

For more open and upcoming IPOs, visit INDmoney’s IPO tracker.