Reliance Jio Infocomm Ltd, the telecom unit of Reliance Industries Ltd, is reportedly gearing up for a substantial IPO in 2025, potentially valuing the company at over Rs 9.3 lakh crore, according to a note from Jefferies released on Thursday.
Jefferies forecasts that Jio could debut with a valuation of USD 112 billion, offering significant upside of 7-15% to Reliance Industries’ share price. The brokerage suggests that if Jio is spun off from Reliance Industries, their fair value estimate for RIL stock would be Rs 3,580, while in the event of an IPO, it would adjust to Rs 3,365 after accounting for a 20% holding company discount.
The note indicates that the IPO could primarily consist of an offer for sale by minority shareholders, and highlights investor preference for a spin-off approach for Jio’s listing. Jefferies also presents a bull case scenario valuing RIL stock at Rs 3,700, implying an 18% upside.
Operationally, Jio’s strategic tariff adjustments, including hikes in telecom services while maintaining feature phone tariffs, underscore its focus on revenue growth and market share expansion. Analysts view these moves as setting the stage for a potential public listing by 2025, akin to Jio Financial Services (JFS).
Jefferies suggests that Reliance Industries shareholders would receive proportional shareholding in Jio, adjusted for RIL’s 66.3% stake, aiming to unlock better value without the holding company discount. Following listing, RIL’s ownership in Jio would decrease to 33.3%, meeting IPO requirements by offering 10% of Jio to the public.
The analysis concludes that while RIL would retain majority control post-listing, Indian stock market dynamics typically apply a holdco discount of 20-50% to listed subsidiaries, influencing fair value assessments.
