Reliance Jio IPO At Rs 7.5 Lakh Crore Valuation? Will This Be India’s Biggest Ever IPO?
The CY 2021 saw an outburst of IPOs being launched, heavily valued too, despite the very much prevailing Covid-19 pandemic.
Nearly 63 companies launched their initial public offerings, raising a total of over Rs 1.2 lakh crore. This year in 2022, about 23 companies are known to launch their IPOs, targeted to raise almost Rs 44,000 crore, stated a PTI report.
However, the most looked forward to event in the Indian IPO market in 2022 would be the likely launch of Reliance Industries’ telecom arm, Reliance Jio.
According to the foreign brokerage CLSA, this event would be a major milestone for the debt-laden Indian telecom industry.
To know more about the upcoming Reliance Jio IPO launch, read further.
CLSA on on Reliance Jio IPO
The brokerage firm stated that events like the 5G spectrum auction and a probable mega IPO or separate listing of Reliance Jio from RIL will have a significant mark in 2022.
Speaking of Reliance Jio’s IPO listing, it will include 33% pre-IPO stake sales to 13 investors including, 10% to Facebook and 8% to Google in 2020.
The brokerage values Jio’s mobile business at $99 billion enterprise value at 11.5 times EV/EBITDA, along with the telco’s home broadband biz, JioFibre, valued at $5 billion EV.
Jio’s parent company, Jio Platforms has raised Rs 1.52 lakh-crore from an umbrella of marquee global investors, some of which include Facebook, Google, Intel Capital, Qualcomm Ventures, and top private equity players like Silver Lake, Vista Equity Partners, General Atlantic and KKR, among others.
A strong enthusiasm coming from a potential highly valued Jio IPO is heavily buoyed by a recent aftermath in the Indian telecom industry, when the three major telcos, Reliance Jio, Bharti Airtel and Vodafone Idea raised their prepaid tariffs by 20-25% in an attempt to increase their Average Revenue per User (ARPU), along with the telecom reforms package announced by the government in mid-Sept 2021.
CLSA also expects the government to cut mid-band 5G spectrum base prices in 2022, failing which it warned the upcoming spectrum sale won’t succeed.