Reliance Industries Ltd. shares rose over 2% on Monday after the conglomerate's annual general meeting unveiled a series of growth initiatives, including the proposed listing of Jio Platforms, artificial intelligence investments, and new energy projects. The stock pared some gains to trade 1.6% higher at Rs 1,330.50 by afternoon.
The filing of Jio Platforms' draft red herring prospectus (DRHP) marks a significant milestone, bringing the telecom and digital services giant closer to a public market debut nearly a decade after its commercial launch in September 2016. Jio has attracted over $20 billion from global investors including Meta, Google, Silver Lake, KKR, and General Atlantic, with valuations during those rounds ranging from $58 billion to $65 billion. Market expectations now peg its value at roughly $110 billion to $120 billion.
IPO Details and Valuation
The proposed initial public offering will consist of a fresh issue of up to 27 crore shares, resulting in an equity dilution of approximately 3%. Proceeds are expected to be used primarily to reduce debt at Jio Platforms. Brokerages estimate Jio's valuation in the range of $115 billion to $128 billion, broadly placing it on par with Bharti Airtel.
Nomura noted that Airtel's valuation includes stakes in Airtel Africa and Indus Towers. "Adjusted for these investments, the implied equity valuation for Bharti Airtel's India telecom business is Rs 10.6 lakh crore or $113 billion," the brokerage said, suggesting Jio could potentially seek a modest premium to its closest rival. Nomura retained its buy rating on Reliance Industries with a target price of Rs 1,640 per share and estimated Jio's implied valuation at $117 billion to $127 billion.
Digital Business as Growth Driver
Analysts expect Jio to remain the biggest contributor to Reliance's future earnings expansion. Motilal Oswal Financial Services reiterated a buy rating on Reliance Industries with a target price of Rs 1,655 after the AGM, expecting digital businesses to contribute 80% of incremental EBITDA and post an 18% EBITDA compound annual growth rate between FY26 and FY28. Growth is likely supported by a planned 15% wireless tariff hike in the second quarter, market share gains, and continued expansion of home broadband and enterprise services.
Systematix Institutional Research said Reliance's growth profile is broadening beyond its traditional businesses. "The Jio IPO process has formally commenced, while Reliance Intelligence (AI) is emerging as a fourth growth pillar alongside Telecom, Retail, and Energy. The New Energy business is set to enter commercialization in FY27 with initial solar revenues and battery commissioning, and RCPL is targeting ₹1 trillion revenues by FY30 as it scales into a leading FMCG platform," analysts at Systematix said.
AI and Digital Ecosystems
Piyush Pandey, Senior Vice President at Centrum India, values Jio at around $130 billion and expects the IPO to be priced at a modest discount. He believes investors should maintain exposure to both Bharti Airtel and Jio once listed. According to Pandey, the next phase of growth for Reliance Industries will depend on how effectively it monetises its large customer base and rising data consumption. Businesses such as JioSaavn, JioTV, and other digital offerings could provide additional growth opportunities over time.
Nitin Soni, Senior Director and Head of Natural Resources for South and South East Asia at Fitch Ratings, said the proposed issue is a positive development as proceeds will be used to pare debt and improve financial flexibility. "We do expect ARPU to improve 10 to 15% each year, and at the same time, data consumption per user per month will also increase," Soni said. He added that Jio's positioning extends beyond conventional telecom services, with investments in AI, digital platforms, and content ecosystems giving it a broader platform strategy than pure-play telecom operators.
Nuvama cautioned that even if Jio commands a premium valuation in public markets, gains for Reliance shareholders could be tempered by the holding company discount that investors typically apply to diversified conglomerates with complex ownership structures.
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This article is for informational purposes only and does not constitute financial advice.
