Is Jio Sucking Most of the Liquidity from the Market?Reliance Industries LimitedNSE:RELIANCEmitrakmt123What press reports call India's biggest public issue opened on 21 October: up to 27 crore fresh shares at ₹1,065 to ₹1,119, which is ₹28,755 crore to ₹30,213 crore, closing on 23 October with trading expected on 28 October. Every screen is asking the same thing: is this draining the market? Here is what the numbers say, and what they can't say. Where the market stood when I asked about 17,000. My last piece, "Nifty Below Its Weekly Line. Is 17,000 in Range?", went out on 8 October. The Nifty was 7.7% under its 200-day EMA that day, but the broader market was doing well. The Microcap 250 had gained more than 20% in six months and sat 4.6% above its 200-day EMA, 4.9% off its 23 September high: a strong run. The Smallcap 250 was 0.9% above its line. Only the Midcap 150 was already under it, by 4.5%. Thirteen days later the Nifty is 2.6% higher at 22,811, while the Smallcap 250 is 2.6% lower and 1.8% under its 200-day line, the Microcap 250 is 3.2% lower and clinging 0.8% above it, and the Midcap 150 is 4.8% under. The index went up. The market underneath it went down. The pool this issue draws on. On my own liquidity dashboard, one card sets primary supply against secondary-market flows. For July to September, IPO, offer-for-sale and QIP supply of ₹1.43 lakh crore equalled 84% of domestic institutions' net cash-market buying. DIIs net bought ₹1.69 lakh crore in those three months, while FIIs net sold ₹0.57 lakh crore (NSE cash, three months to September 2026). So before this issue came along, supply was already taking equivalent to 84 paise of every rupee the domestic institutions net bought. What this issue adds. At the top of the band the fresh issue is ₹30,213 crore. That is 17.8% of three months of DII net buying, and 39.7% of September's alone (₹76,030 crore). Anchors took ₹8,110 crore of it on 19 October, which leaves about ₹22,100 crore for the public. The company's own allotment letter says 34.34% of the anchor book went to 25 domestic mutual funds through 95 schemes; by my count another 13.8% went to insurers and pension schemes, so about 48% of the anchors came from the domestic institutional pool, the same pool that has been absorbing foreign selling. Day one, measured in September's DII money. On the first evening NSE showed the issue 3.16 times subscribed across all exchanges (62.4 crore shares bid against 19.75 crore on offer, as of 7:00 PM) and 1.74 times on its own platform (34.3 crore shares, 7:01 PM). Taking the roughly 28 crore shares in between as the bids placed on BSE (my working assumption from the totals), BSE is carrying close to half of the day's demand. Day one was not final. Take the rows for domestic institutions, banks and insurers plus mutual funds, and price their bids at the top of the band. That gives ₹32,566 crore across all exchanges and ₹18,300 crore on NSE alone: 43% and 24% of the whole of September's DII net buying, bid in a single day. The offer document's timetable has the basis of allotment on or about 26 October and the blocked funds released on or about 27 October. Until then that money is parked. Bids are not purchases, though. The institutional portion on offer after the anchors is only about ₹5,500 crore, so most of what is bid comes back. What cannot be measured from outside is how much cash is tied up where, and for how long. The absorption cushion is thinning. Look at how much DII buying covered FII selling each month. July: 6.1 times. August: 7.7 times. September: 1.7 times. October so far, 13 sessions: 1.1 times (FIIs net sold ₹48,895 crore, DIIs net bought ₹52,984 crore). The domestic institutions are not buying less, at about ₹4,076 crore a session against ₹3,620 crore in September. The cushion thinned because foreign selling per session rose about 1.8 times, from ₹2,096 crore to ₹3,761 crore. On 21 October, on provisional figures, both were net buyers (FIIs about ₹1,022 crore, DIIs about ₹1,614 crore) and the Smallcap 250 still fell 2.26%. Whoever sold that day, it wasn't net selling by institutions. FII index-futures positioning tells a similar story: the long-short ratio is 0.105, at or below the 5th percentile of 2,164 sessions since January 2018 (median 0.83, range 0.06 to 7.98). Crude and the rupee. Brent was $96.92 on 29 September and $108.44 on 21 October (an intraday reading; the highest settled close since 19 May was $109.86 on 16 October). That is up about 12% in three weeks and about 55% above the late-June low of $70.16. India imports most of its oil, so crude near $108 is a standing weight on the rupee and on bond yields, and the 10-year yield has moved from 7.11% on 25 September to about 7.44%. The rupee is more mixed than "falling": it closed at 97.07 per dollar on 8 October, its weakest close in the data I hold, which goes back to 2001, and has since recovered to about 94.84, roughly 2.3% stronger even as crude kept rising. The leveraged book. The market-wide margin-funded book stood at ₹1,55,718 crore on 16 October, 1.9% under its 30 September high of ₹1,58,716 crore, and the exchange files for 19 and 21 October are not out yet, so the last two falling days are unseen. It has been cut before: its largest 20-session falls since April 2022 were about 14% (to July 2022), 12% (to March 2025) and 8% (to April 2026), and -22% over 40 sessions in 2022. A fall of 12% to 14% from today's level would be roughly ₹19,000 crore to ₹22,000 crore, a bit under the size of the issue. That is arithmetic, not a forecast, and the balance can't tell forced selling from voluntary repayment. What I am not doing: I am not saying whether anyone should apply, and I am not calling the issue the cause of the small-cap fall. Foreign selling, crude, a rupee that touched a record-weak close two weeks ago, a rising VIX (15.68, the highest close of the month, still ordinary against its own history since 2008) and a heavy September of IPOs all overlap with the same days. A handful of sessions can't separate them. The numbers answer the title only in part: on this arithmetic the issue is not most of the pool, but it is a large slice of September's DII buying at a moment when the buffer is thin. What would show it is draining the market: the Smallcap 250 and Microcap 250 closing under their 200-day lines together with an AD ratio under 0.5 and DII net buying shrinking, and the margin book turning down once its files post. What would show it isn't: the small end stabilising once the refunds come back on 27 October, with the book near its high. Either gets logged, not predicted. So here is the question for you. The earlier shocks, including the geopolitical ones, cut the margin-funded book by 8% to 14% within a month. Do you think the Jio IPO could unwind this near-record MTF book by more than they did? Tell me where you stand, and what you would watch.