Jio Platforms likely to become world's 6th-largest telco after IPO

Likely to replace Airtel at peak valuation of $154 bn

Jio Platforms, which is believed to be considering starting the process of filing for an initial public offering (IPO), is estimated by analysts to have an enterprise value (EV) in the range of $136 billion-$154 billion at its peak. This is equivalent to that of the sixth-largest listed telecom company in the world by market capitalisation (mcap) as of today.

 

Jio would also be the fastest telco to achieve this milestone, given that it started services only in September 2016.

 

It will be behind US-based T-Mobile ($282.58 billion), followed by China Mobile ($232.09 billion), AT&T ($198.67 billion), Verizon ($184.41 billion), and Deutsche Telekom ($175.63 billion).

 

At its peak valuation of $154 billion, Jio Platforms will have a higher value than Bharti Airtel's mcap to take the sixth place. In that case, it will be ahead of Comcast, China Telecom, NTT, Softbank, KDDI, Saudi Telecom, America Movil, and Singapore Telecom, among others. Currently at sixth, Bharti Airtel has a market capitalisation of $131.34 billion. 

 

While market capitalisation reflects the total value of a company's outstanding shares, EV provides a more holistic view by incorporating debt, preferred stock, minority interests, and subtracting cash and cash equivalents.

 

According to Goldman Sachs, Jio’s valuation has been pegged at $154 billion, which is a bullish estimate. At a base level, it will be $123 billion, and at a bear level $98 billion. Even with its base-level EV, the company will be at the eighth slot, ahead of American Tower.

 

Jefferies’ valuation projection of $136 billion also takes Jio to the sixth slot. It has pegged the EV of the telecom business at $110 billion, with the rest coming from the non-mobile business.

 

Jio Platforms controls various subsidiaries, including Reliance Jio (which offers mobile services and broadband), Jio Satellite (which runs the satellite broadband business), Saavn Media, Jio Haptik Technologies, and Asteria Aerospace.

 

The company has already rustled up investments to the tune of ₹152,055 crore from top private equity and global tech companies. These companies include Facebook, Silver Lake, KKR, Mubadala, General Atlantic. Vista, TPG, ADIA and Google, which together control over a 32.9 per cent stake in the company.