Jio Platforms shares gain 21.5% in historic Indian market debut

India's stock market saw a record-breaking event on Wednesday as Jio Platforms began trading.

Shares of the telecom and digital services giant climbed 21.5 percent in their first day of trading. This performance pushed the company's market capitalization to 12.5 trillion rupees, equivalent to $131 billion.

The valuation places Jio as the second most valuable company in India, trailing only its parent firm, Reliance Industries. Deven Choksey, founder of DRChoksey FinServ, told CNBC that this valuation positions the stock for inclusion in major benchmark indices. He noted that such inclusion typically generates demand that helps stabilize share prices against oversupply.

Choksey added that investors who purchased stakes around 2021 might seek to exit within six months. By that time, he expects the stock to be part of the MSCI index and the Nifty 50.

The company raised 302 billion rupees, or $3.2 billion, in what became the largest initial public offering in India's history. The offering consisted of 270 million shares priced at 1,119 rupees each. According to BSE data, the public issue was subscribed more than 22 times. Institutional investors led the demand, with the qualified institutional portion subscribed 70.55 times, while retail investors subscribed 2.72 times.

Akash Ambani, managing director of Jio Platforms and son of billionaire Mukesh Ambani, stated that the IPO was fully subscribed within 95 minutes of opening on October 21. Global funds including BlackRock, Capital Group, and GIC participated in the anchor book. The total demand for the share offering reached $78 billion.

Nomura, a global brokerage, issued a buy rating on Wednesday with a target price of 1,340 rupees. This represents a 19.7 percent upside from the IPO price. The firm cited an end to Jio's capital expenditure cycle and projected a sharp improvement in free cash flow. Shares were last trading at 1,360 rupees. Reliance Industries holds more than a 66 percent stake in Jio, while Meta Platforms' affiliate Jaadhu Holdings owns nearly 10 percent and Google International holds 7.7 percent.