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There have been talks of Reliance Jio IPO coming for quite some time now. The company first mooted it in 2019. There were also speculations at Reliance’s AGM this year that the company may announce the Reliance Jio’s IPO timeline. However, so far, there is no concrete timing or direction from the company on the same.
Capital and markets investment group CLSA has released a note on the much-anticipated IPO of Reliance Jio.As per the note, Reliance Jio’s IPO can lead to a re-rating in the stock of rival BhartiAirtel. “BUY-rated Reliance Industries holds 67% of RJio and valuation is 60% higher than the 33% stake from the 2020 sale that raised US$20bn. We also expect RJio’s planned IPO to serve as a further catalyst for BUY-rated Bharti stock,” CLSA said. While Jio is currently unlisted, CLSA has advised investors to gain exposure through its parent RIL.
The analyst expects Jio’s leadership and Bharti’s execution to lead the sector to $38 billion annual revenue by FY26. “In a blue sky scenario, the duo’s revenue could rise up to 50% higher, to $47 billion by FY26, if they achieve 90% combined share and ARPU (average revenue per user) reaches Rs 300. In addition, a boost from 5G’s fixed wireless access (FWA) and industrial internet could further accelerate growth,” she said.
Both Airtel and Reliance Jio together control around 78% of India’s mobile market, according to global brokerage firm CLSA. While Jio has more subscribers at 460 million, Airtel has the highest ARPU at Rs 203.
“While Bharti and RJio enjoyed similar 18-19% CAGRs in mobile revenue over FY20-23, Bharti India’s growth pulled ahead in 1HFY24. Nevertheless, we expect RJio’s greater investment to pay off with faster EBITDA growth over the next three years. However, Bharti is more efficient at allocating capital. We expect it to book a higher ROCE than RJio and forecast US$10bn annual operating cash flow by FY26,” CLSA said.
Jio leads with 41% market share by revenue versus 37% for Bharti. “The growth gap between Jio and Bharti is narrowing and both have the potential to gain even higher share, especially from VodafoneIdea, which still holds 16% share across India. VI has yet to roll out 5G while RJio and Bharti are ramping up 5G services,” it said.
Capital and markets investment group CLSA has released a note on the much-anticipated IPO of Reliance Jio.As per the note, Reliance Jio’s IPO can lead to a re-rating in the stock of rival BhartiAirtel. “BUY-rated Reliance Industries holds 67% of RJio and valuation is 60% higher than the 33% stake from the 2020 sale that raised US$20bn. We also expect RJio’s planned IPO to serve as a further catalyst for BUY-rated Bharti stock,” CLSA said. While Jio is currently unlisted, CLSA has advised investors to gain exposure through its parent RIL.
The analyst expects Jio’s leadership and Bharti’s execution to lead the sector to $38 billion annual revenue by FY26. “In a blue sky scenario, the duo’s revenue could rise up to 50% higher, to $47 billion by FY26, if they achieve 90% combined share and ARPU (average revenue per user) reaches Rs 300. In addition, a boost from 5G’s fixed wireless access (FWA) and industrial internet could further accelerate growth,” she said.
Both Airtel and Reliance Jio together control around 78% of India’s mobile market, according to global brokerage firm CLSA. While Jio has more subscribers at 460 million, Airtel has the highest ARPU at Rs 203.
“While Bharti and RJio enjoyed similar 18-19% CAGRs in mobile revenue over FY20-23, Bharti India’s growth pulled ahead in 1HFY24. Nevertheless, we expect RJio’s greater investment to pay off with faster EBITDA growth over the next three years. However, Bharti is more efficient at allocating capital. We expect it to book a higher ROCE than RJio and forecast US$10bn annual operating cash flow by FY26,” CLSA said.
Jio leads with 41% market share by revenue versus 37% for Bharti. “The growth gap between Jio and Bharti is narrowing and both have the potential to gain even higher share, especially from VodafoneIdea, which still holds 16% share across India. VI has yet to roll out 5G while RJio and Bharti are ramping up 5G services,” it said.
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