Mega IPO In 2025? Not Tatas OR Adanis, But Mukesh Ambani May List This Company At Rs 9 Lakh Cr Valuation

One of the much-awaited behemoth IPO in Indian market history will likely enter in 2025. To be precise, this upcoming IPO will have a listing valuation of a mind-boggling Rs 9 lakh crore or $112 billion and above. And it's neither an Adani nor a Tata Group-backed company. But instead, the leader in the telecom industry, Reliance Jio which is backed by Reliance Industries, and owned by the richest man in India, Mukesh Ambani.

Global brokerage Jefferies expects the mega of Reliance Jio in 2025, with a potential valuation of over Rs 9.3 lakh crore. As per the brokerage's latest note, Reliance Jio IPO could be purely an offer for sale by minority stakeholders.

It added that Reliance could look to spin off Jio and list it after a price discovery. Jefferies also noted that both domestic and foreign investors are in favour of the spin-off route for Jio listing.

If Reliance Jio is listed through a spin-off route in 2025, then it will be the second spin-off by Reliance Industries in 3 years. Last year, in August, Reliance spun off Jio Financial Services and listed the financial services subsidiary via the price discovery method.

The possibility of a Reliance Jio heightened after Jio boldly hiked its tariff rates for the first time since its inception. As per Jefferies, Jio leading the way in the recent tariff hikes unlike in the past, alongside, keeping feature phone tariff unchanged, signals that the company is focusing on monetization and subscriber market share gains. Hence, these measures create a scenario for a possible listing by next year.

As per Kotak, in the last two rounds of tariff hikes, Vi (Dec 2019) and Bharti (Dec 2021) took the lead, while R-Jio was the last to raise tariffs. Unlike, Bharti and Vi, who have been very vocal about the need for industry tariff repair, R-Jio has not been upfront about the need for industry-wide tariff hikes.

Now, Jio has increased tariffs by ~17-25% on popular prepaid plans and by ~17% (or Rs50/month) on entry-level postpaid plans. On the other hand, Jio kept the tariffs for Jiophone and JioBharat phone users unchanged. The latest tariff hike has come into effect from July 3, 2024, and the complete flow-through of the hike is likely from December 2024.

If Reliance Jio is listed, its share price will compete with rivals like Bharti Airtel and Vodafone Idea.

The listing of Reliance Jio is also expected to boost its parent Reliance Industries share price as well, which is the most valued company in India in terms of market share. Jefferies believes Jio could list a $112 billion valuation, which may add a 7-15% potential upside to Reliance shares.

Hence, Jefferies maintained a BUY on Reliance with a target price of Rs 3,580 per share. The target price signals a potential of 14% upside in Reliance stock price ahead.

Currently, Reliance's share price traded at Rs 3149 apiece, down by 0.6% with a market cap of Rs 21,31,535.75 crore. The stock's 52-week high and low is at Rs 3,217.90 apiece and Rs 2,221.05 apiece respectively.

It needs to be noted that neither Mukesh Ambani nor Reliance Industries has made any announcement in regards to launching Reliance Jio IPO.

Also, the Reliance Jio IPO buzz comes at a time when the excitement of the largest IPO from Tata Group namely Tata Sons IPO dulled in early 2024. While focus has also shifted to South Korea-based auto giant Hyundai filed its draft prospectus with SEBI to launch the biggest IPO of the Indian market to the tune of Rs 25,000 crore.

It will be keenly watched if Reliance Jio's IPO will surpass Hyundai's IPO size and take the title of biggest ever public offer.