Jio’s mega public offering may cement its leadership position in telecom

The annual general meeting (AGM) of Reliance Industries Ltd (RIL), India’s largest company, has for long been associated with big-ticket announcements. Over the past decade, Chairman & Managing Director Mukesh Ambani has used the occasion to announce the launch of Jio’s mobile telephony service, a $10 billion foray into new energy, and a generous 1:1 bonus.

This year’s AGM on August 29 did not disappoint. The focus was Jio Platforms. “Today, it is my proud privilege to announce that Jio is making all arrangements to file for its IPO (initial public offering). We are aiming to list Jio by the first half of 2026, subject to all necessary approvals,” Ambani said.

There is a lot of anticipation in the market about the issue. Jio’s business has transformed from pure-play telecommunications into a much larger suite of technology offerings. Its telecom dominance is unquestioned; it accounted for 41% of India’s 1.16 billion subscriber base at the end of July, according to the Telecom Regulatory Authority of India. In the over the top (OTT) space, it has JioStar, which has more than 300 million subscribers and has rights to enviable properties such as the Indian Premier League and other marquee cricket tournaments.

Motilal Oswal Financial Services says the IPO, the first public issue from the RIL stable since 2006, could be the largest in India with a potential size of Rs 30,000 crore, beating Hyundai Motor India’s Rs 27,869 crore IPO last year.

The Tech Player

At this year’s AGM, Ambani outlined how Jio is capable of creating as much value as its global counterparts. “I am sure it will be a very attractive opportunity for all investors,” he said.

According to Bhavesh A. Shah, MD & Head (Investment Banking) at Equirus Capital, Jio Platforms, with its disruptive strategies, has not just acquired a significant subscriber base but also created a digital movement in India by bringing down the cost of data. “The IPO would broaden India’s tech representation beyond IT services, giving investors exposure to a consumer internet and digital infrastructure story,” he says.

In 2020, the company saw major investments from global tech giants such as Meta and Google, which together invested more than $10 billion. “It’s almost unheard of for Google and Meta or such companies to sit on the same cap table. Their strategic interests diverge globally, but India is an exception because it’s the largest addressable internet market outside China,” says Aakash Agrawal, Associate Director (Digital and New-age Business), Anand Rathi Investment Banking.

The IPO will give these investors a chance to reduce or liquidate their holdings. “It is obvious they will consider the option given that they put in the money over five years ago,” says Arpit Jain, Joint MD of brokerage firm Arihant Capital Markets.

The big question isn’t just the company’s valuation, but how it will be valued. A report by Citi Research right after the AGM in August estimated Jio Platforms’ enterprise value at about $135 billion. Equirus’ Shah says the company will be valued less like a telecom firm and more like a global digital platform. “ARPU (average revenue per user), monetisation and ecosystem stickiness will matter more than subscriber counts,” he says.

At the AGM, Ambani’s son Akash, who spearheads Jio, said the company carries the largest wireless data traffic in the world. “India’s next digital leap, and Jio’s next growth engine, will come from businesses, large and small. Jio is building simple, scalable, and secure platforms for MSMEs and enterprises alike,” he said.

The Big Play

Given Jio’s multiple offerings, its functions are complex. Jain says it is a “deep-tech powerhouse”, making it formidable. “In today’s dynamic tech world, they have a presence in OTT, fintech and AI to name just a few areas. It is difficult to replicate Jio’s model due to multiple entry barriers.”

Shah says Jio has always positioned itself as a digital company. “Once there is scale in connectivity, the company has been able to layer multiple services on top. Jio Platforms has transformed into a digital-first, consumer-tech platform that sits at the intersection of telecom, data, and digital services,” he says.

Jio’s plans for the future rest on five assurances—connect every Indian on mobile and broadband, equip every Indian with digital services, digitise every Indian enterprise with simple, scalable and secure platforms, herald the AI revolution, and expand operations abroad.

A potential shot in the arm could be a proposal before the Securities and Exchange Board of India to allow companies valued more than Rs 1 lakh crore to dilute just 2.5% of their equity, from 5% earlier. “At Jio’s scale, even 2.5% translates into a sizeable float and gives promoters flexibility in timing and structuring the offer. It could also mean that RIL prioritises strategic alignment and price discovery over raising a very large primary corpus upfront,” says Agrawal of Anand Rathi Investment Banking.

To Scale

From a numbers point of view, the JioAirFiber fixed wireless broadband service adds over one million homes each month and Jio True 5G has over 220 million users. Jain maintains Jio’s IPO is an indication that RIL is looking at the “very long-term.” India’s large population, he says, offers an unlimited opportunity. “With telecommunications, they have gone deep into data penetration. Now, we are seeing the making of a massive tech company.”

A JM Financial report says Jio’s IPO increases the probability of a sharp hike in telecom tariffs by nearly 15% by November or December, which is likely to be positive for both Jio and its biggest rival Bharti Airtel. Ambani, at the AGM, also spoke of RIL developing AI as the new growth engine and embedding it across all businesses, from retail and telecom to energy and entertainment. For this, a new subsidiary, Reliance Intelligence, has been set up “to house India’s next generation AI infrastructure, global partnerships, talent for AI and build AI services for India.”

The journey to becoming a deeptech major is clearly underway. A key stop on the way will be the listing of Jio Platforms.

@krishnagopalan