Home News Reliance Jio IPO: A Potential Mega-Event in 2025?

Reliance Jio IPO: A Potential Mega-Event in 2025?

Reliance Jio IPO

Jefferies, a global financial services firm, suggests in a recent note that Reliance Jio Infocomm Ltd, the telecom arm of Reliance Industries Ltd, may be poised for a significant initial public offering (IPO) in 2025. This potential IPO could value Reliance Jio at over ₹9.3 lakh crore (approximately USD 112 billion).

Valuation and Impact on Reliance Industries Share Price:

The Jefferies note indicates that a Reliance Jio IPO could lead to a 7-15% increase in the share price of its parent company, Reliance Industries Ltd. This projection is based on a valuation of USD 112 billion for Reliance Jio.

Spin-off Scenario and Fair Value Estimations:

If Reliance Jio is spun off from Reliance Industries and subsequently listed, Jefferies estimates the fair value of Reliance Industries’ stock to be ₹3,580. However, if the IPO proceeds without a spin-off, the fair value is estimated to be ₹3,365, considering a 20% holding company discount.

Potential for an Offer for Sale by Minority Shareholders:

Jefferies proposes that the entire IPO could consist of an offer for sale by minority shareholders. This approach would involve Reliance Industries spinning off Jio and listing it after a price discovery process. Both domestic and foreign investors seem to favor this spin-off route for the Jio listing.

Bull Case Scenario and Upside Potential:

In a more optimistic scenario, Jefferies values Reliance Industries’ stock at ₹3,700, suggesting an 18% upside potential.

Operational Considerations and Focus on Monetization:

Reliance Jio has been proactive in announcing tariff hikes, although it maintained feature phone tariffs unchanged. This strategic move indicates a focus on monetization and gaining subscriber market share.

Possible Public Listing in CY25:

Jefferies views these recent developments as a potential catalyst for a public listing of Reliance Jio in 2025. The firm suggests that Reliance Industries might pursue either an IPO or a spin-off, similar to its approach with Jio Financial Services (JFS).

Shareholder Implications and Value Unlocking:

According to Jefferies, Reliance Industries shareholders would receive a proportionate shareholding in Reliance Jio, adjusted for RIL’s 66.3% stake in the latter. This arrangement could bypass the holding company discount and enhance value unlocking for RIL shareholders. The owner’s stake in Jio would decrease to 33.3% upon listing.

Fulfilling IPO Requirements and Retaining Majority Control:

With a 33.7% minority shareholding in Reliance Jio, Reliance Industries could meet IPO requirements by listing 10% of Jio. This approach would allow RIL to retain majority control even after the listing.


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