Jio IPO: ₹30,000 Crore Mega Listing Puts Telecom Stock Valuations, Tariff Hikes And ARPU Growth In Focus

Reliance Industries’ planned ₹30,000 crore initial public offering (IPO) of Jio Platforms could influence valuations across India’s telecom sector, with the listing and Vodafone Idea’s proposed fundraise emerging as key developments for the industry.

Industry watchers expect the Jio IPO valuation to draw attention from investors assessing the worth of listed telecom companies. The completion of the listing, along with progress on Vodafone Idea’s long-pending fundraise, could also pave the way for a broader tariff hike, according to industry analysts.

They also feel further gains in telecom stock valuations will depend on the pace of average revenue per user (ARPU) growth over the long term. Analysts estimate that ARPU could grow at a compound annual growth rate (CAGR) of nearly 5% between FY29 and FY36.

No Fears For Bharti Airtel

Jio’s mega IPO could trigger a shift in telecom sector allocations, with investors potentially moving funds away from Bharti Airtel. Analysts, however, see limited grounds for concern, noting that Jio’s initial free float is expected to be around 3%, while Bharti Airtel has a wider institutional shareholder base.

However, Jio could be valued at a premium to Bharti Airtel’s India operations at the proposed IPO price. Its strong position in wireless and home broadband, along with the small public float, could support demand for the stock after listing.

Jio IPO Could Unlock Value For Reliance Industries

The proposed listing could unlock value for Reliance Industries Limited (RIL), which houses Jio Platforms as part of its telecom and digital businesses.

Apart from the Jio IPO, analysts have identified several developments that could influence RIL’s stock performance. These include the expansion of quick-commerce operations under Reliance Retail, improved spreads in the oil-to-chemicals (O2C) business and faster growth in fast-moving consumer goods (FMCG), artificial intelligence (AI), data centres and new energy.

The IPO will offer investors an opportunity to assess Jio Platforms as a separate listed business. Its valuation could also provide a reference point for investors comparing telecom companies, particularly as they track tariff changes and revenue growth across the sector.

Jio Platforms IPO May Raise ₹30,200 Crore

Jio Platforms is reportedly considering a price band of ₹1,065-₹1,119 per share for its IPO, Reuters reported, citing sources. At the upper end of the band, the offering could raise around ₹30,200 crore.

The proposed issue could value the company at approximately ₹11 lakh crore, potentially making it one of India’s largest IPOs and surpassing Hyundai Motor India’s 2024 offering.

The IPO has attracted attention from primary market investors, given its size and the presence of global investors such as Meta and Google in Jio Platforms’ investor base. The proposed listing also follows the high-profile listing of the National Stock Exchange of India in September.

Where Will Jio IPO Proceeds Go?

Jio Platforms is led by Akash Ambani, son of Reliance Industries chairman Mukesh Ambani. The company operates Reliance’s telecom and digital businesses, covering mobile services, fixed broadband, cloud, entertainment, enterprise technology and AI offerings.

According to the details reported, Jio Platforms plans to use up to ₹275 billion of the net proceeds to repay or prepay borrowings of its telecom subsidiary, Reliance Jio Infocomm. The proposed use of funds will be closely watched alongside the IPO valuation, as investors assess the implications for Reliance Industries and the wider telecom sector.

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