Jio IPO: A Market Gamechanger Looms

Reliance Jio is gearing up for what could be a groundbreaking initial public offering (IPO) in the telecom industry, according to a report by financial services firm CLSA. Boasting a formidable subscriber base of over 500 million for its 4G and 5G services, Jio commands a commanding 42% market share, positioning it as a major contender in the sector. Reliance Industries' Chairman, Mukesh Ambani, disclosed plans to list Jio's IPO by the first half of 2026, contingent upon necessary regulatory approvals.

In light of these developments, CLSA's report provides a comprehensive examination of Jio's accomplishments over the past ten years. Highlighting sector-leading growth, Jio reached $13 billion in revenue and $7 billion in Ebitda. The report anticipates Jio's average revenue per user (ARPU), which stands at Rs209, will drive substantial revenue and Ebitda growth to $19-11 billion by FY28CL, bolstered by strategic investment amounting to $51 billion in capital employed. Jio is valued in Reliance's sum-of-the-parts valuation at $128 billion enterprise value on a 13x EV/Ebitda basis.

The report suggests the Jio IPO will likely act as a catalyst for reevaluation, particularly for competitor Bharti Airtel. With Jio leading India's digitalisation efforts, it and Bharti represent prime investment opportunities due to their strong market presence. As a testament to its execution prowess, Jio holds a commanding all-India revenue market share of 42.3%, with Bharti trailing at 39.2%. Jio is also advancing in the residential market with its Jio Fiber and Jio AirFibre services, already attracting 20 million subscribers and aiming for 100 million households. Recent tariff hikes, alongside the ongoing shift to 5G, underscore Jio's strategic revenue adjustments, promising substantial growth for Reliance Industries in the upcoming years.

(With inputs from agencies.)