RIL preparing for Jio IPO in 2025, retail business to go public much later: Report

Preparations for the highly anticipated initial public offering (IPO), which could become India’s largest, are underway, although no banks have been appointed yet to manage the sale.

On Monday (Nov. 4), Reuters reported that Mukesh Ambani, RIL's chairman, is targeting a stock exchange listing for Jio by 2025.

Analysts currently estimate Jio's valuation at over $100 billion, with Jefferies valuing the potential IPO at $112 billion in July.

However, no final decision has been made on Jio’s valuation. RIL’s retail arm is expected to go public later, as it is still addressing certain operational issues.

Unlike Jio Financial Services, Jio Platforms won’t be demerged but will be listed as a subsidiary structure, a source told Reuters.

As per the Reuters report, another source explained that while the IPO would allow existing investors to exit, most of their shares will remain in the non-promoter category.

RIL holds 67 percent in Jio Platforms, with private equity investors and strategic partners, such as Meta and Google, holding the rest.

In 2020, these partners invested Rs 1.5 trillion for a combined 18 percent stake, while private equity firms like KKR and Silverlake, along with Saudi Arabia's Public Investment Fund, acquired a further 15 percent.

Jio recently partnered with Nvidia to develop AI data centers in India.

Jio Platforms' telecom business is operated through its fully owned subsidiary Reliance Jio Infocomm Ltd., serving over 479 million users across India.

Since entering the market in 2016, Jio disrupted the industry by offering free voice services and reducing data costs, establishing one of the world’s most affordable data markets.

Jio Infocomm also manages older data centres and digital services, while Jio Platforms holds stakes in several startups.

India’s telecom industry is in a stable position compared to recent years, with major players Jio and Bharti Airtel Ltd. forming an effective duopoly, as Vodafone Idea Ltd. continues to receive government support.

The industry has seen three rounds of tariff hikes since 2021, and more increases are expected as telecom companies aim to improve their return on capital.

In June, Jio led a round of hikes, with Jio, Airtel, and Vodafone Idea raising tariffs by 10-21 percent and introducing paid unlimited 5G plans.

Reliance Jio recently reported a 7 percent increase in average revenue per user (ARPU) to Rs 195.1 after three stable quarters, along with an 18 percent revenue growth to Rs 31,709 crore in Q2.

Its earnings before interest, taxes, depreciation, and amortization (EBITDA) rose by 18 percent to Rs 15,931 crore, while net profit increased by 23 percent to Rs 6,539 crore.

A Bernstein Research report last month projected that Jio could become the world’s sixth-most-valuable telecom company, with a market cap of $150 billion if it is spun out debt-free.

In contrast, Reliance Retail’s IPO has been delayed due to high competition in the retail sector, particularly from quick-commerce companies like Swiggy, which is also planning a public offering, reports Reuters.

Reliance’s retail division, which includes Reliance Smart, Digital, and Trends stores, posted a 1 percent revenue drop to Rs 76,302 crore in the September quarter, though profit rose by 1 percent to Rs 2,836 crore.

In 2019, Mukesh Ambani stated that both Jio Platforms and Reliance Retail would pursue listings within five years, signaling the group’s commitment to advancing its key ventures toward public markets.