Jio IPO Approval: Meta Stake Valuation Boost
By ThePip Desk
Meta Platforms’ 9.9% Jio stake nears public valuation as India’s regulator approves Jio’s $3.8B IPO, a key step for Meta’s investment.
Meta Platforms (NASDAQ:META) shares advanced approximately 0.8% to $575.50 on Friday, following news of a significant regulatory clearance for Jio Platforms’ initial public offering (IPO).
- Meta stock jump: ~0.8%
- Meta closing price: $575.50
- Jio IPO proposed offering: $3.8 billion
- Meta’s 2020 investment: $5.7 billion for a 9.9% stake
India’s securities regulator has approved Jio Platforms’ proposed $3.8 billion offering, a crucial step towards publicly valuing Meta’s significant 9.9% stake. Meta became Jio’s largest minority shareholder in 2020 with a $5.7 billion investment.
The upcoming IPO will involve the issuance of 270 million shares, with $3.3 billion of the proceeds earmarked for debt repayment at Reliance Jio Infocomm. Meta Platforms will not receive any funds from these IPO proceeds.
Public Scoreboard for Investment
The primary advantage for Meta is the establishment of a public valuation benchmark for its investment. Once Jio’s shares commence trading, investors can ascertain the value of Meta’s stake via a transparent market price, eliminating reliance on private valuations.
- Jio Platforms mobile subscribers: Over 533 million
- Meta’s current share price: $575.50
- GuruFocus (GF) Value estimate for Meta: $843.91
- Meta’s price below GF Value: 31.81%
Jio Platforms operates across telecom, cloud services, artificial intelligence, and enterprise networks, supporting a potential upside for Meta indicated by its current share price being 31.81% below its GuruFocus Value estimate of $843.91.