Reliance Jio, India's largest telecom operator, is housed under Reliance Industries Limited (RIL) as a subsidiary company. Recently, Jio hiked the tariffs on its mobile plans. The interesting part was that the first move came from Jio and not Airtel. This tariff hike could be an indicator of something big - IPO (Initial Public Offering). It is no secret that Reliance plans to separate Jio and Reliance Retail from itself via IPO in the future. Jio's IPO could be extremely near now that the telco has hiked the tariffs.
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Before going for the IPO, Jio likely wanted its ARPU (average revenue per user) and ROCE (return on capital employed) metrics to improve so that shareholders could find value in the company. Jio's IPO is expected to be the largest the country has seen so far. Not being able to monetise 5G through mobile plans was a concern, but now the FWA (fixed wireless access) business of Jio is picking up speed to create value for the investors.
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The details surrounding Reliance Jio's IPO could be announced at the next annual general meeting (AGM) of Reliance Industries in August. Reliance Jio's IPO is likely going to be the largest in the country as companies that have a valuation of more than Rs 1 lakh crore are required to sell at least 5% of the company. Jefferies values Jio at Rs 11.11 lakh crore as per an ET report.
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This means that 5% of Jio is worth around Rs 55,500 crore. It will be interesting to see when exactly the IPO for Jio will happen, but whenever it does, it is most likely going to be the largest ever in India. The Jio IPO will be followed by Reliance Retail, which will be yet another large IPO in the country.
