Theranautilus Secures $1.2 Mn in Seed...
19 Nov 2024
Reliance Jio, the telecom arm of Reliance Industries Ltd, might see a significant IPO in 2025. Jefferies predicts the listing could reach a valuation exceeding ₹9.3 lakh crore. The potential valuation of $112 billion could boost Reliance Industries' share price by 7-15%, according to the brokerage firm.
Jefferies noted that Jio's recent approach to tariff hikes, unlike before, shows a focus on monetization and gaining subscriber market share, which supports the possibility of a public listing in 2025.
For Jio’s listing, two paths are available: an IPO or a spin-off similar to Jio Financial Services (JFS).
Jefferies pointed out concerns about the holdco discount in India, ranging from 20-50%, and even steeper for conglomerates in Korea and Taiwan (50-70%). They also highlighted the challenge of mobilizing a large retail investor base in an IPO. A potential solution could be for Jio to purchase some shares offered by private equity funds post-spin-off, addressing the lower controlling stake issue.
This strategy could avoid the holdco discount and unlock better value for Reliance Industries shareholders. On listing, the owner's stake in Jio would drop to 33.3%, compared to 45.8% for JFS at its listing. Given the strong performance of RIL and JFS stocks since the spin-off, and the less-than-majority stake of owners in JFS, the spin-off route might be more appealing for Jio.
Chat on WhatsApp
Request a call back
