Reliance Jio Eyes Record IPO, Valued at $112 Billion by Jefferies

Jefferies has suggested that Reliance Jio, the telecom arm of Reliance Industries Ltd., may embark on a significant initial public offering (IPO) in 2025, potentially valuing the company at a substantial $112 billion. This move could offer a notable 7-15 percent upside to Reliance Industries’ share price, according to analyses by the brokerage firm. The anticipated valuation for Jio’s IPO could exceed ₹9.3 lakh crore, marking a pivotal development for one of India’s leading telecom operators.

The rationale behind Jio’s possible IPO stems from its recent strategic initiatives, particularly in tariff adjustments aimed at bolstering monetization and expanding its subscriber base. By maintaining feature phone tariffs while implementing increases elsewhere, Jio has positioned itself favorably for market share gains, reinforcing the case for a public listing by 2025.

For the IPO, Jio has two main options under consideration: a traditional public offering or a spin-off model akin to Jio Financial Services (JFS). Jefferies’ analysis highlights concerns such as the holdco discount prevalent in Indian markets, which ranges from 20-50%, and even higher for conglomerates in other regions like Korea and Taiwan. Additionally, managing retail investor mobilization and addressing ownership stakes post-listing are key considerations for Jio’s strategic planning.

The potential listing of Jio through an IPO could mitigate holdco discounts, offering enhanced value unlocking opportunities that could benefit Reliance Industries’ shareholders significantly. If pursued, the IPO would likely reduce the owner’s stake in Jio to approximately 33.3%, akin to the structure observed following the recent JFS spin-off where the owner’s stake initially stood at 45.8%. This strategic move underscores Reliance Industries’ ongoing efforts to leverage market dynamics and investor sentiment effectively.