Reliance Jio, India's largest telecom operator, will support the telecom sector's growth with its IPO (Initial Public Offer). The IPO of the telco is expected to hit the market in the first half of 2026. Jio's adding new users, and periodically taking the tariffs up. With the IPO on the horizon, the telco will definitely look to raise the tariffs further or participate in the anticipated tariff structure changes in the near future. This won't just benefit Jio, but also the competitors and ultimately the sector.
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Both Jio and Airtel stand to generate plenty FCF (free cash flow), and the IPO would also act as a catalyst to that, said JM Financial in the latest note. The brokerage has reiterated its 'BUY' rating for Bharti Airtel and Bharti Hexacom. Jio's IPO doesn't have a definitive timeline as of yet, but should take place in the first half of 2026.
Upon listing, Jio's market capitalisation should be one of the highest in the country, and would likely place tthe company above Airtel in market cap rankings. JM Financial has also shared a positive view for Reliance Jio.
In its note, JM Financial said, "We believe Jio’s IPO is planned for 1HCY26 subject to necessary approvals, we believe, increases the visibility of a ~15% tariff hike in the next few months."
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The tariff hikes would improve margins and returns on business for the telcos. It would be a necessity for the telcos going forward to meet their higher ARPU goal. Airtel wants to reach an ARPU figure of Rs 300 in the short-term now, and has also expressed interest in changing the tariff structure in India. JM Financial expects a 15% hike in tariffs, and that should be enough for Airtel to reach Rs 300 ARPU.
At the end of Q2 FY26, Airtel's ARPU stood at Rs 256.
