Jio IPO Expected to Surpass $6 Billion...
05 Nov 2024
Reliance Jio, the telecom arm of Mukesh Ambani’s Reliance Industries, is preparing for an initial public offering (IPO) exceeding $6.25 billion, expected to take place either in the second or third quarter of 2025, according to sources familiar with the matter. The IPO of Reliance Retail is anticipated to follow shortly after, with a projected valuation between $125 billion and $150 billion.
The exact timing of both IPOs will depend on various factors, including market conditions and the company’s strategic assessment. The valuation for Reliance Jio, India’s leading telecom operator, is being benchmarked against its competitor Bharti Airtel. By the time of the IPO, Jio’s valuation is expected to significantly surpass Airtel’s due to its higher subscriber base and other metrics like EBITDA.
Currently, Airtel has crossed the $100 billion market cap milestone, whereas Jio leads with about 480 million mobile subscribers, compared to Airtel’s under 400 million. However, in terms of average revenue per user (ARPU), Airtel leads with Rs 211, while Jio stands at Rs 194.
Based on an estimated valuation of $125 billion, Jio’s IPO could be valued at around $6.25 billion or more. The Securities and Exchange Board of India (SEBI) requires a minimum 5% promoter contribution in an IPO, and Jio is expected to adhere to this requirement without exceeding it.
Reliance Retail’s IPO, which may follow soon after Jio’s, is expected to have a valuation ranging from $125 billion to $150 billion. Sources indicate that the conglomerate aims for these IPOs to be highly successful, with strong investor interest and multiple oversubscriptions, making the timing of the launch crucial.
When contacted, Reliance Industries Limited (RIL) declined to comment on the IPO details. Mukesh Ambani, RIL's Chairman and Managing Director, had previously announced in 2019 that both Reliance Jio and Reliance Retail would be listed within five years. However, the COVID-19 pandemic delayed these plans, and no official timeline has been released since.
Currently, RIL is focusing on three key areas: new and renewable energy, technology including artificial intelligence, and consumer markets. In a recent discussion with Nvidia CEO Jensen Huang, Ambani highlighted the advent of the Intelligence Era.
RIL has partnered with Nvidia to develop AI computing infrastructure and an innovation center. Nvidia has also entered into several other agreements, including one with the Tata Group.
Although RIL is exploring various high-profile partnerships in AI and the semiconductor space, sources suggest that the company is not planning to establish semiconductor manufacturing plants at this stage.
RIL’s shares closed at Rs 1,305.95 each on Tuesday, marking a 0.3% increase.
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