Industry insiders are expecting that additional information regarding Jio’s noteworthy initial public offering (IPO) will be revealed at the company’s parent, Reliance Industries Ltd. (RIL), annual general meeting (AGM), which is set for next month, according to an article by Kalyan Parbat in the Economic Times.
“The much-awaited initial public offering (IPO) of the telecom market leader is now coming soon,” stated Mayuresh Joshi, head of equity research at William O’Neill & Co.’s Indian division. Brokerage firm Jefferies, which will be keeping an eye on Jio’s listing developments at the next RIL AGM, agrees with this sentiment. “Rising focus on monetization could be a precursor to its imminent listing,” stated Jefferies.
Jio’s average revenue per user (ARPU), an important measure of performance for telecom companies, is expected to rise as a result of the recent tariff increase and revenue from the 5G business. Before the share sale, Jio’s enhancement is probably going to attract more investors.
Jio has a valuation of roughly $133 billion (Rs 11.11 lakh crore) according to Jefferies. Jio’s share sale could be worth Rs 55,500 crore, making it India’s largest IPO to date. Current regulations require companies valued at Rs 1 lakh crore or more to sell at least a 5% stake in their IPO.
Under the leadership of Mukesh Ambani, Reliance Industries Limited owns 67.03% of Jio Platforms Ltd. (JPL), which consists of Reliance’s digital and telecom assets. The telecom sector makes up the majority of JPL’s business. The remaining 32.97% of JPL is owned by strategic investors Meta and Google, which own 17.72%, and various global private equity investors such as Vista Equity Partners, KKR, PIF, Silver Lake, L Catterton, General Atlantic, and TPG, collectively holding 15.25%. These international investors gave JPL more than Rs 1.52 lakh crore in 2020.
Given the usual four-year holding period for PE investors, analysts believe that these private equity firms may think about exiting their investment through the IPO.
Jio’s IPO seems well-timed, with its improving financials supported by the recent tariff hikes and the possibility of further price increases in the upcoming year. According to Jefferies, Jio’s earnings and revenue will increase at a compound annual growth rate of 18–26% between FY24 and FY27.
Everyone will be curious to see if Reliance Jio can pull off the largest IPO in Indian history or not. If it happens, it will completely change the telecom and financial landscape of the nation, as the market expects more clarity at the upcoming RIL AGM.
