Jio Platforms may be valued at $148 billion by FY27: ICICI Securities

ICICI Securities optimistic about IPO-bound firm's strong free cash flow and potential deleveraging

Jio Platforms Limited (JPL) is likely to have a valuation of $148 billion by the time it goes public on the back of strong free cash flow and potential deleveraging, ICICI Securities said in a note.

 

It has raised valuation multiples for Bharti Airtel owing to sustainable growth in average revenue per user (ARPU) and an improved finance structure.

 

The valuation upgrades for Indian telecom operators under its coverage are being done citing "renewed optimism". They are driven by stronger financial and business fundamentals across the sector, an improved tariff structure, renewed push for 5G adoption and premiumisation trends.

 

Reliance Industries (RIL) chairman Mukesh Ambani had said in August at the group’s annual general meeting that preparations had begun for listing Reliance Jio in the first half of 2026.

 

Jio, RIL’s telecom arm and the group’s digital businesses, are housed under Jio Platforms.

 

“We expect JPL’s initial public offering (IPO) to come at premium valuations, which was also the case during JPL’s dilution,” he said, citing JPL’s stake sales in FY21 which was done at a valuation of $65–70 billion.

 

JPL had earlier raised about ₹1.52 trillion from 13 investors, led by Facebook (now Meta), Google (now Alphabet), Silver Lake, Vista Equity Partners, General Atlantic, KKR, Mubadala, ADIA, TPG, Intel Capital and Qualcomm Ventures, among others, for 32.9 per cent stake.

 

Meta holds a 10 per cent stake in Jio Platforms, while Google has another 7.7 per cent. PE investors have the remaining 16 per cent. JPL is currently 66.3 per cent owned by RIL.

 

“We shift our estimates and valuations to JPL consolidated (earlier Reliance Jio), and expect earnings before interest, taxes, depreciation and amortisation (Ebitda)/profit after tax (PAT) compound annual growth rates (CAGRs) of 18.1 per cent/21.1 per cent over FY25–28E (estimated). We assign 16x adjusted Ebitda to JPL, resulting in an equity value of $148 billion for September 2027E (estimated),” the brokerage said in the note.

 

“We expect its telecom business return on capital employed (RoCE) expansion to reach an inflection point and likely pivot to 21.4 per cent in FY28E (FY25: 14.3 per cent), aided by strong free cash flow (FCF) generation, up 3.3x to ₹558 billion, thus, potentially supporting deleveraging. In parallel, spectrum net blocks will likely dip,” it added.

 

ICICI Securities added that JPL was driving new business, including content, storage, digital enterprise solutions and managed services for medium, small and micro enterprises and artificial intelligence (AI) deployment powered by Reliance Intelligence, which could create more value over the medium term.

 

For the period FY25-FY28, a net profit CAGR of nearly 47 per cent is estimated to come from the company’s non-connectivity business.

 

Upside is also expected from its tech stack, the 5G rollout, fixed wireless access and unlicensed band radio and patents.

 

“Unlicensed Band Radio Fixed Wireless Access (UBR-FWA) alone could unleash an opportunity to serve a global population of ₹3.9 billion in under-penetrated fixed broadband markets,” the brokerage added.

 

The brokerage added that JPL’s IPO and relatively higher valuations should benefit the entire sector and the events may remain as a potential re-rating catalyst for the sector.

 

ICICI Securities revised the valuations for Bharti Airtel, raising the target price of the stock to ₹2,400, and upgrading to buy from hold. This comes as it expects capex to drop further in FY26 due to completion of 4G and 5G rollouts, with the requirement of spectrum coming up only in FY30. 

 

“Capex over the next three years (FY26–28) is estimated at ₹53,100 crore, in comparison to depreciation and amortisation (D&A) of ₹82,700 crore.

 

This implies Bharti’s mobile business would generate higher free cash flow, and shall be greater than profit after tax. Also, deleveraging would drive invested capital lower,” the brokerage said, adding that this would mean higher RoCE. Despite the transition to 5G SA, capex jump may not be significant.

 

“We see Bharti entering an era of ‘value creation’ over FY25–28E — in drastic contrast to its FY12–20 phase. Bharti finally should be able to recoup the value destroyed during FY12–20, deleverage its balance sheet and generously reward shareholders,” the brokerage added.

 

It expects Bharti’s earnings before interest and taxes (Ebit) to expand at a CAGR of 25.1 per cent over FY25–28 while capital employed shall decline slightly. This is due to a sharp rise in dividend payout, and deleveraging.

 

Bharti’s pre-tax RoCE is likely to improve from 14.2 per cent in FY25 to 28.4 per cent in FY28, the brokerage said in its estimates.