Jio Platforms, a subsidiary of Reliance Industries, completed India's largest-ever initial public offering (IPO) by issue size, yet managed to pay its investment bankers substantially less in fees compared to Hyundai Motor India's 2024 offering.
Jio's Leaner Banker Payout
According to its issue expense disclosures, Jio Platforms disbursed Rs 196.2 crore in fees and commissions to its 19 book-running lead managers (BRLMs) for its monumental Rs 30,213 crore IPO. This figure represents a mere 0.65% of the total issue size, highlighting a remarkably cost-efficient approach to managing the public offering.
Hyundai's Higher Costs
In stark contrast, Hyundai Motor India's Rs 27,870 crore IPO in 2024, which was about 8% smaller than Jio's, incurred significantly higher banker fees. Hyundai paid Rs 493 crore to its five BRLMs, amounting to 1.77% of its issue size. This means Jio's banker fee pool was approximately 60% smaller than Hyundai's, despite handling a larger and more complex transaction.
Overall Expense Disparity
The difference extended beyond just banker fees to overall issue expenses. Jio's total estimated IPO expenses stood at Rs 469.7 crore, or 1.56% of the issue size. This included Rs 50 crore for advertising and marketing, Rs 50.6 crore for selling commissions, and Rs 45 crore for miscellaneous expenses. Hyundai's total expenses, conversely, reached Rs 624 crore, or roughly 2.2% of its issue size.
Structural and Subscription Differences
The two major IPOs also varied in their fundamental structure. Hyundai's offering was entirely an offer for sale (OFS), meaning the proceeds went to the selling shareholder. Jio's, however, was a fresh issue, with the capital raised going directly to the company. Furthermore, investor demand for Jio's IPO was robust, closing with approximately 22 times subscription, far exceeding Hyundai's 2.4 times subscription rate.
Listing Details
Jio Platforms was scheduled to list on the BSE and NSE on Wednesday, October 28, at 10 am, with the IPO issue price fixed at ₹1,119 per share. The successful listing followed a public offering that demonstrated a strategic approach to minimizing financial intermediary costs.