Jio Platforms, Reliance Industries’ digital services arm, is preparing for a landmark initial public offering (IPO). However, investor concerns over its valuation have emerged ahead of the share sale.
The telecom company plans to raise Rs. 30,200 crore (USD 3.2 billion) by issuing 270 million shares at a price range of Rs. 1,065 to Rs. 1,119.
Considering the high end of the price range, Jio Platforms’ valuation will be around USD 108 billion, below previous estimates above USD 130 billion.
The IPO will be India’s biggest IPO in rupees, beating Hyundai Motor India’s 2024 IPO. Nevertheless, investors are divided on whether to value Jio Platforms as a tech firm or a telecoms firm.
Jio has positioned itself as a digital technology business rather than a traditional telecom utility. However, some market participants believe its core revenues remain closely tied to connectivity and data consumption.
Deven Choksey, managing director of Mumbai-based DRChoksey Finserv, told CNBC that Jio remains a telecom company, with its entertainment and gaming applications helping drive data consumption.
Jio is India’s largest telecom operator, with more than 500 million subscribers. Yet its proposed valuation remains below that of rival Bharti Airtel, whose market capitalization stood at USD 117.5 billion, according to LSEG data.
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Jio’s initial public offering is taking place amid growing differences between Reliance Industries chairman Mukesh Ambani and SpaceX founder Elon Musk over satellite internet services in India.
Elon Musk accused Ambani of leveraging the benefits of being the dominant player and said Jio’s status has restricted Starlink’s entry into the country. The Indian government was reportedly waiting for security clearance on Starlink and Jio’s satellite communication project.
Over 66% of Jio Platforms is owned by Reliance Industries, while Facebook (Meta) and Google own about 10% and 7.7% of Jio Platforms, respectively. The IPO will test investor appetite for Jio’s growth ambitions and the valuation it seeks in India’s rapidly expanding digital market.