Reliance Jio prepares for IPO in 2025 at $112 billion valuation: Jefferies

Jefferies said Jio might debut with a valuation around $112 billion, potentially contributing a 7%-15% increase in the share price of Reliance Industries

Reliance Jio, the telecommunications arm of Reliance Industries Ltd, is reportedly gearing up for a major initial public offering (IPO) slated for 2025. The potential valuation of the IPO could exceed Rs 9.3 trillion, according to investment banking company Jefferies.

The brokerage firm also suggested that Jio might debut with a valuation around $112 billion, potentially contributing a 7 per cent to 15 per cent increase in the share price of Reliance Industries.

“Jio leading the way in the recent tariff hikes unlike in the past while keeping feature phone tariffs unchanged shows focus on monetisation and subscriber market share gains. These moves create a case for a possible public listing in CY25 in our view,” the firm stated.

The brokerage reaffirmed its ‘buy’ rating for RIL shares, setting a target price of Rs 3,580 per share, reflecting a potential upside of over 13 per cent from the recent closing price of Rs 3,164. Since January, RIL’s stock has surged by more than 22 per cent, outperforming the Nifty 50 index, which saw a 12 per cent increase.

In the report, Jefferies said, “Their primary concern is the holdco discount of 20 per cent to 50 per cent in India but steeper (50 per cent-70 per cent) for conglomerates in Korea and Taiwan. The large retail investor mobilisation in the case of an IPO is another concern. The lower controlling stake in Jio on spin-off could be addressed by buying a part of the shares offered by private equity funds after the spin-off.”

Jefferies also suggested that the upcoming IPO could consist of an offer for sale by minority shareholders. It speculated that RIL might consider spinning off Jio and listing it separately post-price discovery, a move favoured by both domestic and foreign investors.

In August 2023, Reliance Industries successfully spun off its financial services arm, Jio Financial Services, listing it via a price discovery process.

In June, Reliance Jio Infocomm introduced a new range of tariff plans offering unlimited data, signalling its strategy to boost monetisation and expand its subscriber base. This move prompted competitors Bharti Airtel and Vodafone Idea to also announce revised tariff plans.