Jefferies predicts Reliance Jio IPO in 2025 with a $112 billion valuation

PTC News Desk: According to Jefferies, Mukesh Ambani’s Reliance Jio Infocomm Ltd. may go public in 2025, posing yet another massive problem for India’s main market.

The firm stated in a July 10 note that the telecom business is concentrating on monetisation and subscriber market share gains by spearheading the recent pricing hikes while maintaining feature phone tariffs unaltered.

“These actions establish a case for a potential public listing in CY25,” the note’s equities analyst, Bhaskar Chakraborty, from Jefferies stated. As it did with Jio Financial Services Ltd., Reliance Jio may consider an IPO or spin-off of Jio, the report stated.

Better control would result from the telecom major going public, but doing so would entail a holding company discount of between 20 and 50 percent and significant retail mobilisation. Reliance Industries Ltd., which currently has a 33.7% minority stake in the telecom business, may meet the requirements for an IPO by listing 10% of Jio. “However, 35% of an IPO is reserved for the retail segment that would require large mobilisation from retail investors.”

However, the vertical spin-off approach would help RIL shareholders by avoiding the holding company discount and enabling higher value unlocking. However, according to Jefferies, the owner’s share of Jio will drop to 33.3% upon listing.

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The brokerage stated that based on these considerations, both domestic and foreign investors seem to favor Jio’s prospective spin-off option for listing.

According to Jefferies, Jio may list for $112 billion, which would mean a 7–15% gain for its parent company Reliance Industries. The note stated that if Jio is spun off, RIL’s fair value would increase to Rs 3,580 per share, representing a 15% upside, whereas if they choose to go through with an IPO, RIL’s fair value would decrease to Rs 3,365 per share in the base case.

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