Reliance Industries Ltd (RIL)’s planned Rs 30,000 crore Jio Platforms IPO is shaping up to be more than India’s biggest-ever share sale. At a potential valuation of around Rs 11 lakh crore, the offering will put a public market price on billionaire Mukesh Ambani’s digital empire, test Reliance’s complex holding company valuation and reset the pecking order in India’s telecom industry.
The proposed Rs 30,000 crore IPO has already drawn strong interest from global and domestic investors. Existing marquee backers are seeking to increase their exposure rather than sell shares, according to people familiar with the matter.
The telecom and digital-services arm of RIL has completed roadshows across the Americas, Europe and Southeast Asia, with Akash Ambani and Isha Ambani personally meeting investors. Jio is being positioned as a technology company rather than merely a telecom operator.
Domestic roadshows are now under way, with mutual funds and other institutional investors seeking allocations. If completed as planned, the offering would be India’s largest IPO, surpassing Hyundai Motor India’s Rs 27,800 crore issue in 2024, and Reliance Industries’ first public offering in three decades.
The IPO is expected to be an entirely fresh issue, without an offer-for-sale component. Jio is also focusing on retail investors and plans to price the offering in a way that leaves some value on the table.
The company is set to price its shares at Rs 1,065-1,119 apiece, according to an earlier Bloomberg report, implying a market value of as much as Rs 10.3 lakh crore. At the upper end of the price band, the issue could raise about Rs 30,200 crore.
The issue is scheduled to open for subscription on Oct. 21 and close on Oct. 23. The anchor book is expected to open on Oct. 19, with listing planned for Oct. 28. The details remain subject to change.
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At that valuation, Jio would trade at about 12 times its estimated FY28 enterprise value to earnings before interest, taxes, depreciation and amortisation (EV/EBITDA). That compares with around 10.3 times for Bharti Airtel’s India business at its current market price, excluding Indus Towers.
Nomura’s valuation is somewhat more conservative. It estimates Jio’s IPO equity value at Rs 9.8 lakh crore to Rs 10.3 lakh crore at the proposed price band. After adding net debt, spectrum liabilities and lease liabilities, Nomura estimates Jio’s enterprise value at around Rs 10.9 lakh crore to Rs 11.4 lakh crore.
That implies a FY28 EV/EBITDA multiple of 10.5 times to 10.9 times, below Nomura’s target multiple of 12 times but still above Bharti Airtel’s implied valuation.
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What does the Jio IPO mean for Reliance Industries?
Reliance Industries owns around 66.4% of Jio Platforms. A public listing will therefore provide investors with a direct market value for one of RIL’s most important growth businesses.
At Nomura’s valuation range, Reliance’s Jio stake would be worth around Rs 481-506 per RIL share before applying a holding company discount. After a 20% discount, the value falls to around Rs 385-405 per share.
Nomura estimates that the combined impact of the lower valuation and a potential holding company discount could reduce the value assigned to Jio in Reliance’s sum-of-the-parts valuation by around Rs 136 per share.
However, Nomura says Reliance’s stock has already corrected sharply in the run-up to the listing and that its current price more than compensates for the potential valuation haircut.
That means the IPO may not necessarily destroy value for existing RIL investors even if Jio receives a public market discount. Instead, the listing could make the discount more transparent and potentially provide a route for value unlocking.
The IPO will also change the nature of RIL’s investment proposition. Investors who want direct exposure to Jio’s telecom and digital services businesses will be able to buy Jio shares after the listing rather than gain that exposure only through Reliance Industries.
Why Bharti Airtel could also benefit
The brokerage also argues that Bharti does not deserve a significant discount to Jio. Bharti has stronger free cash flow generation and a higher return on capital employed, while its investments in Indus Towers, Airtel Africa and Nxtra provide additional value.
Nomura also prefers Bharti Airtel, citing its higher proportion of premium subscribers. That could help the company limit subscriber downgrades and churn when tariffs rise.
During the previous tariff increase, Bharti’s average revenue per user rose by Rs 34 over the following three quarters, compared with Rs 25 for Jio. Bharti also added 2% subscribers during that period, while Jio lost 0.3%.
The key question now is whether the Jio IPO will accelerate a long-delayed tariff increase.
The brokerage expects the case for a tariff hike to strengthen after Jio’s IPO and Vodafone Idea’s proposed fundraise. It builds in a smartphone tariff increase of around 15% in December 2026.
Nomura also expects tariff hikes to become an important earnings driver for Jio after its public listing, particularly as the period of easy subscriber gains begins to fade.
The IPO could therefore have a circular impact on the sector: Jio’s public listing may force greater focus on earnings growth, a tariff increase could improve industry cash flows, and stronger earnings could support a re-rating of both Jio and Bharti.
Can both telecom stocks rerate?
At the proposed IPO valuation, Jio may trade at a premium to Bharti Airtel’s India business. But Jio has market leadership in wireless and home broadband, while its low free float could support scarcity value after listing.
Bharti, on the other hand, offers stronger free cash flow generation, premiumisation, deleveraging and exposure to businesses such as data centres and financial services.
Nomura also sees Bharti’s current discount to Jio as unjustified and expects that gap to narrow, at least once Jio becomes a listed company.
For Reliance Industries, the IPO is a test of whether public-market visibility can unlock the value of its digital business or expose a larger-than-expected holding company discount.
For Bharti Airtel, it is a test of whether investors will pay a premium for stronger cash generation and operating execution over Jio’s growth and market leadership.
And for the telecom industry, the listing could mark the beginning of a new valuation cycle, provided the long-awaited tariff hikes finally arrive.
(Disclaimer: This article has been written by Nikhil Agarwal, who is not a SEBI-registered Research Analyst or an Investment Adviser. Nikhil Agarwal and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here)
