Retail investors borrow $234 million to fund Jio Platforms debut trade

Retail investors in India borrowed roughly 22.28 billion rupees ($234 million) to purchase shares of Jio Platforms on the company's debut, placing the stock among the country's top four margin-funded equities. The telecom and digital firm, owned by Mukesh Ambani, surged 26.7% in its first session, valuing it at about $137 billion and ranking it as the second-largest listed company in India by market capitalisation.

The National Stock Exchange classified Jio Platforms as a Group 1 security and the Bombay Stock Exchange placed it in a similar Group A category, allowing margin funding from the opening trade. The margin trading facility, an exchange-approved product, lets investors borrow money from brokers at interest rates that typically range from 9% to 18% per annum.

"Naturally, (Jio Platforms) would draw interest from investors across the board. In that sense, it was bound to become eligible ... sooner or later," said Deven Choksey, managing director of DRChoksey Finserv.

"A section of investors believes Jio Platforms can give a higher return than the cost at which they are borrowing money," said Ashish Nanda, president and digital business head at Kotak Neo.

Despite the sizable borrowing, the margin position represents only about 0.17% of Jio Platforms' total market value, according to Dhiraj Relli, managing director and CEO of HDFC Securities. The heavy first-day borrowing follows a recent decline in India's overall cash-market margin book, which fell to 1.51 trillion rupees by the end of October from a record 1.59 trillion rupees in September.