SynopsisReliance Jio’s upcoming IPO aims to raise approximately $3 billion. The company intends to allocate Rs 27,500 crore to prepay debt, strengthening its balance sheet for future investments in 6G, artificial intelligence, broadband, and digital services expansion.ETMarkets.comReliance Jio plans a $3 billion IPO, using Rs 27,500 crore to pay debt and fuel growth in 6G, AI, and digital services.Reliance Jio's draft red herring prospectus (DRHP), which was filed on Friday, gave an insight into how India's largest digital consumer brand will use the proceeds from the public offering, which is expected to raise around $3 billion. The company plans to use Rs 27,500 crore from the fresh issue to prepay debt at Reliance Jio Infocomm (RJIL), its key telecom subsidiary. The remaining proceeds will be used for general corporate purposes, according to the DRHP filed with Sebi.The move indicates that Reliance Industries Chairman Mukesh Ambani's strategy is to strengthen Jio's balance sheet before the next phase of growth in 6G, artificial intelligence, broadband and digital services.Rs 27,500 crore to reduce debtUnlike an offer-for-sale, where proceeds go to selling shareholders, Jio's IPO is structured as a fully fresh issue. That means the capital raised will flow directly into the company. The single biggest use of funds is debt reduction. The DRHP earmarks Rs 27,500 crore for prepayment of borrowings raised by Reliance Jio Infocomm.The loans proposed to be repaid are largely external commercial borrowings (ECBs) taken from a consortium of global lenders, including Bank of America, HSBC, DBS, Mizuho, MUFG, Standard Chartered, State Bank of India, BNP Paribas, Sumitomo Mitsui Banking Corporation, United Overseas Bank, Crédit Agricole, ANZ, First Abu Dhabi Bank and Citibank, among others.These borrowings were primarily raised to fund capital expenditure, including spectrum acquisition and network expansion, according to the draft papers.As of March 2026, the outstanding borrowings proposed to be prepaid totalled around Rs 30,057 crore, with the IPO proceeds expected to retire a substantial portion of that debt.Why debt repayment mattersLower leverage could improve Jio's financial flexibility at a time when the company is entering another investment cycle.Jio has already rolled out nationwide 5G services, expanded fixed broadband through JioFiber and JioAirFiber, and is investing in cloud infrastructure, enterprise services and AI capabilities. Reducing debt would lower interest costs and free up cash flows for future expansion.The company generated Rs 44,928 crore in operating revenue during the March quarter, while quarterly profit rose 13% to Rs 7,935 crore. Average revenue per user improved to Rs 214, supported by tariff hikes and higher customer engagement.General corporate purposesBeyond debt repayment, the remaining IPO proceeds will be used for general corporate purposes.The DRHP says these could include strategic initiatives, funding organic and inorganic growth opportunities, capital expenditure, working capital requirements, payment of deferred liabilities, marketing and brand-building exercises, and other corporate requirements approved by the board.The company has not specified the exact allocation across these heads, saying deployment will depend on business requirements over time.Read More News on(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price...moreless(You can now subscribe to our ETMarkets WhatsApp channel)Read More News on(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price...moreless