Jio Platforms IPO: Why Religare sees re-rating in Reliance Industries; check target, upside

Religare Broking has said the proposed initial public offering (IPO) of Jio Platforms could be the trigger that closes the valuation gap in Reliance Industries Ltd (RIL). The brokerage said a standalone listing of Jio would give investors a transparent, market-driven valuation of RIL’s largest growth business, help narrow the discount typically applied to conglomerates, and potentially trigger a re-rating of the stock.

Religare said RIL offers a favourable entry opportunity after a two-year phase of price and time correction. It said the stock is trading near the lower end of its multi-year range, limiting downside risks, while the consolidation has removed the premium previously factored in for future growth.

According to the brokerage, an independently quoted price for Jio would bring clarity to RIL’s sum-of-the-parts valuation and serve as the key catalyst for multiple expansion. It advised investors to accumulate the stock ahead of the listing, warning that waiting until the debut could mean missing the main phase of the re-rating.

Citing the draft red herring prospectus (DRHP), Religare said up to Rs 27,500 crore of the net proceeds from the primary issue has been earmarked for repaying borrowings at Reliance Jio Infocomm. It said lower interest costs could improve margins, accelerate free cash flow generation and strengthen the balance sheet. Jio Platforms’ IPO is reportedly planned for October, although the company has not officially announced a timeline.

Jio reported revenue from operations of Rs 1,46,885 crore, EBITDA of Rs 76,255 crore, with an EBITDA margin of 51.9 per cent, and net profit of Rs 30,049 crore in FY26. It also has more than 524 million active subscribers. Religare said heavy 5G capital expenditure is largely complete and capital intensity is easing, with future growth expected to come from average revenue per user (ARPU) gains, 4G-to-5G upgrades, and enterprise cloud and AI services.

Over the next six to 18 months, Religare expects ARPU hikes and debt reduction to drive EBITDA expansion and a sharp increase in profits. Over the following 18 to 36 months, it said operating leverage in the retail business and the scaling up of the New Energy business could trigger a second group-wide re-rating, with the proposed Jio IPO remaining the central catalyst in its outlook on Reliance.

"We maintain a conviction 'buy' rating on Reliance with a target price of Rs 1,696. The convergence of a two-year price and time correction, impending Jio price discovery, balance sheet optimisation, and multi-engine earnings compounding creates one of the most compelling risk-reward setups in the market today. We advocate initiating exposure at current levels and accumulating on corrections," said Religare.