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Reliance Jio IPO: India's largest-ever initial public offering (IPO) - Jio Platforms IPO - is set to open for public subscription on Wednesday, 21 October. With a price band of ₹1,065– ₹1,119 per equity share, the company intends to raise between ₹28,755 crore and ₹30,213 crore through the public issue. Jio IPO is a completely fresh issue of up to 27 crore equity shares.
Mukesh Ambani-led oil-to-telecom-to-retail conglomerate Reliance Industries (RIL) currently owns a 66.43% stake in Jio Platforms. Among other major stakeholders in the company are Meta Platforms (9.98% stake through its affiliate, Jaadhu Holdings LLC) and Google International LLC (7.73% stake).
Jio IPO is one of the most sought-after IPOs in India in recent history. The grey market premium (GMP) of Jio Platforms on Friday, 16 October, morning was ₹220. Considering the upper price band of the issue at ₹1,119, the current Jio IPO GMP indicates the stock could list at ₹1,339, at a premium of nearly 20%.
Experts highlight that Jio's long-term growth prospects are bright due to the rising trend of data consumption in India, growth in broadband, and increasing 5G penetration.
Tariff hikes and monetisation of digital services can drive up its average revenue per user (ARPU) growth.
"With strong network leadership, large-scale infrastructure, and a deepening digital ecosystem, Jio is well positioned to sustain industry- leading growth over the medium to long term. We expect around a 12% tariff hike over the next 3-4 months that will support growth in ARPU. We ascribe it a current equity valuation of ₹11.5 lakh crore at an EV/EBITDA of 12 times on FY28E EBITDA," said Centrum.
Vinit Bolinjkar, the head of research at Ventura, underscored that while Jio’s proposed valuation at nearly 12 times EV/EBITDA and market leadership offer a strong foundation, long-term investors should maintain a cautious outlook and closely monitor critical operational metrics relative to market peers.
"ARPU growth execution requires careful observation; while Jio stands at nearly ₹216, Bharti Airtel leads the industry with an ARPU of nearly ₹257 to ₹264, highlighting that sustained pricing power and tariff hikes will be vital for Jio to narrow this gap," said Bolinjkar.
Moreover, traction in fibre broadband and enterprise solutions will determine if Jio can successfully capture high-margin corporate connectivity alongside Airtel, whose total valuation trades at an EV/EBITDA of nearly 10 times, said Bolinjkar.
Riyank Arora, Associate Vice President – HNI and Derivatives, Hedged.in, is of the view that investors should approach IPOs with a long-term investment thesis rather than viewing them merely as opportunities to capture listing gains.
"Listing-day performance is often influenced by market sentiment, subscription dynamics and the pricing of the issue, which may not necessarily reflect the company’s intrinsic value or long-term growth potential. Sustainable wealth creation, on the other hand, is driven by earnings visibility, business fundamentals, competitive positioning, capital allocation and the ability to consistently deliver growth," Arora said.
However, a strong business is not automatically a good investment at every valuation.
According to Arora, investors must assess whether the IPO is reasonably priced relative to its growth prospects, profitability and industry peers.
"Listing gains can be worth capturing when valuations become excessive, but investors with a long-term horizon should focus on the underlying business and its ability to compound earnings over time. Ultimately, the objective should be to invest in quality businesses at sensible valuations, rather than speculate on short-term price movements,” Arora said.
Disclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
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