Jio IPO: How Rs1,000 invested in Reliance in 1977 grew to over Rs 50 lakh

Reliance Industries’ upcoming Jio Platforms IPO marks another milestone in the conglomerate’s five-decade wealth creation journey. An investment of Rs 1,000 in Reliance Industries’ initial public offering in 1977 would be worth nearly Rs 50 lakh today, excluding dividends, highlighting the impact of long-term investing and corporate actions.

The original investment has multiplied through a series of bonus share issues over the years. The value rises further when the shares of Jio Financial Services, which was demerged from Reliance Industries and subsequently listed, are included.

How a Rs 1,000 investment turned into lakhs

Reliance Industries launched its IPO in 1977, when investors could purchase 100 shares with a face value of Rs 10 each for Rs 1,000.

Over the following decades, the company issued bonus shares on multiple occasions, increasing the number of shares held by long-term investors without requiring additional investment.

Reliance issued bonus shares in the ratio of 3:5 in 1980 and 1983. These two issues increased an initial holding of 100 shares to 256 shares.

The company subsequently announced bonus issues in the ratio of 1:1 in 1997, 2009, 2017 and 2024. As a result, the original 100 shares grew to 4,096 shares.

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The value of these shares has risen to nearly Rs 50 lakh, according to the report. The calculation excludes dividends received by shareholders over the years.

Jio Financial Services adds to shareholder wealth

The demerger of Jio Financial Services added another layer to Reliance’s wealth creation story.

Eligible Reliance Industries shareholders received one share of Jio Financial Services for every Reliance share held on the applicable record date.

For an investor whose original 100 Reliance shares grew to 4,096 shares, the demerger translated into an equivalent holding of 4,096 Jio Financial Services shares.

Based on the valuation cited in the report, these shares add approximately Rs 4.5 lakh to the investor’s overall wealth.

The combined value of Reliance Industries and Jio Financial Services holdings therefore exceeds the value of the original Reliance investment alone.

Reliance shares versus gold

Reliance Industries’ long-term returns have also outpaced the appreciation in gold prices over the same period, according to the report.

In 1977, Rs 1,000 could buy approximately 20.58 grams of gold, when the price of 10 grams stood at Rs 486.

At current valuations cited in the report, that quantity of gold would be worth more than Rs 3 lakh, compared with nearly Rs 50 lakh for the original Reliance shareholding, excluding dividends and the additional value from the Jio Financial Services demerger.

The comparison illustrates how corporate growth, rising share prices and bonus issues can substantially increase the value of an equity investment held over several decades. However, past performance does not guarantee similar returns in the future.

Jio Platforms IPO

The proposed Jio Platforms IPO is expected to be a major event for India’s primary market. Its scale could make it one of the biggest public offerings in the country’s history.

For Reliance Industries, the listing would represent another significant development in a business empire that has expanded across energy, retail, telecommunications, digital services and financial services.

While the long-term performance of Reliance shares offers an example of wealth creation through equity investing, the returns from Jio Platforms will depend on its valuation, business performance, growth prospects and market conditions.

(Disclosure: Firstpost is a part of the Network18 Group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.)