Didn't Get Jio Shares? Rs 4.7 Lakh Crore Is Coming Back To Investors' Accounts

The basis of allotment for Jio Platforms' Rs 30,213-crore IPO is due on Monday. The registrar KFin Technologies had not yet listed the issue on its allotment status page at about 6:30 pm.

Excluding the anchor book, investors bid for 438.26 crore shares against 19.75 crore on offer, according to consolidated BSE and NSE bid data published by the NSE. Valued at the Rs 1,119 issue price, or Rs 1,065 for employees after their discount, those bids were worth about Rs 4,90,340 crore, against roughly Rs 22,078 crore worth of shares on offer. The difference, about Rs 4,68,263 crore, is money investors set aside but will not spend on Jio shares.

Strictly speaking, most of this money never left investors' accounts. Public-issue bids in Indian IPOs are made through ASBA or UPI, which block the amount in the bidder's bank account rather than debiting it. Once allotment is final, the amount for any shares allotted is debited, and the rest is unblocked.

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Where The Money Sits

Most of the money belongs to big institutions. Qualified institutional buyers bid 70.55 times their quota, which is why their share of the refund pool dwarfs everyone else's.

What It Means If You Applied

Retail investors could bid for up to 14 lots, or 168 shares, blocking Rs 1,87,992 at the Rs 1,119 issue price. But with more applications than available lots, no retail applicant will get more than one lot of 12 shares.

So a retail investor who bid the maximum and gets no shares will see the full Rs 1,87,992 unblocked. One who is allotted a lot will have Rs 13,428 debited and the remaining Rs 1,74,564 released. Someone who bid for a single lot either pays Rs 13,428 or gets it all back.

Retail investors as a group bid for about Rs 25,867 crore of shares against roughly Rs 9,516 crore on offer, so around Rs 16,351 crore of retail money is due back.

Funds for applications that do not receive shares are scheduled to be released on Tuesday, Oct. 27, the same day shares are credited to successful applicants' demat accounts. Investors who bid through UPI will see their mandate revoked, while those who used net banking ASBA will see the block on their account lifted. Jio Platforms is set to list on Wednesday, Oct. 28.

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Where The Money Could Go Next

The released funds land as the primary market stays busy. Five mainboard IPOs are open or opening this week. The list includes EAAA India Alternatives (Rs 1,200 crore, open until Oct. 28), SFC Environmental Technologies (Rs 667.53 crore, Oct. 27 to 29), M.K. Sons Fine Jewels (Rs 275.40 crore, Oct. 28 to 30), BLS Polymers (Rs 255 crore, Oct. 27 to 29) and Bombay Coated and Special Steels (Rs 183.06 crore, Oct. 29 to Nov. 2).

Together, those five issues are seeking about Rs 2,581 crore, less than 1% of the money being released from the Jio book.

How much of the returning cash stays in equities is an open question. The bulk of it belongs to institutional investors, who do not disclose where their unallotted funds go next. For retail investors, the money simply becomes available again, a few days after it was locked up for what turned out to be India's most sought-after share sale.

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