According to Jefferies, Reliance Jio, the telecom unit of Reliance Industries Ltd, could be headed for a major initial public offering (IPO) in 2025, with a potential valuation exceeding ₹9.3 lakh crore ($112 billion). This could result in a 7-15 percent upside to the Reliance Industries share price.
“Jio leading the way in recent tariff hikes, unlike in the past, while keeping feature phone tariffs unchanged, shows a focus on monetization and subscriber market share gains. These moves create a case for a possible public listing in CY25 in our view,” Jefferies noted.
Their primary concern is the holdco discount of 20-50% in India but steeper (50-70%) for conglomerates in Korea and Taiwan. The large retail investor mobilization in the case of an IPO is another concern. The lower controlling stake in Jio on spin-off could be addressed by buying a part of the shares offered by private equity funds after the spin-off,” Jefferies said in the report.
Jefferies added, “This would avoid the holdco discount and enable better value unlocking, benefiting >Reliance Industries Ltd (RIL) shareholders. The owner’s stake in Jio would fall to 33.3% upon listing. We note that the owner’s stake in the recently spun-off Jio Financial Services (JFS) was 45.8% at the time of listing. The strong performance of RIL and JFS stock prices since the event, along with the less than majority stake of the owners in JFS, may influence the owner to adopt the spin-off route for Jio. Elevate your career with VIT’s MBA programme that has been designed by its acclaimed faculty & stands out as a beacon for working professionals.
DoT rebuffs Congress’s claims on mobile tariff hikes as ‘misleading
DoT Responds to Congress Criticism on Mobile Tariff Hikes
New Delhi: The Department of Telecommunication (DoT) addressed the Congress party’s criticism regarding recent mobile tariff hikes by telecom companies. The DoT clarified that mobile rates are determined by market forces and that the government does not intervene in this process.
This response followed accusations from Congress, which claimed that Prime Minister Narendra Modi’s government was “fleecing” 1.09 billion mobile users by permitting the country’s three largest telecom companies to increase tariffs without any oversight or regulation. The three major telecom operators – Airtel, Jio, and Vodafone Idea – have recently implemented tariff increases, effective from July 3 and 4. Reliance Jio raised prices by an average of 20%, Vodafone by 16%, and Airtel by 15%.
The DoT emphasized that the Telecom Regulatory Authority of India (TRAI) regulates rates. It also highlighted that Telecommunications Service Providers raised tariffs after more than two years, during which they invested heavily in rolling out 5G services.
