Reliance Jio's IPO could be India's largest at ₹30,000 crore: Motilal Oswal

Reliance Jio’s public listing planned for the first half of next year could well be the India’s largest at ₹30,000 crore, according to brokerage Motilal Oswal (MOSL), which has pegged the equity value of the holding company, Jio Platforms Limited (JPL), at ₹11.9 trillion or $135 billion.

Till now, Hyundai India’s IPO holds the badge of largest IPO that the country has seen. It had raised $3.3 billion in 2024.

MOSL has thus valued Reliance Industries’ stake in JPL at ₹7.91 trillion or $90 billion. JPL’s enterprise value (EV; equity plus debt) has been pegged at $151 billion by the domestic brokerage.

Brokerages Morgan Stanley, Citi and BofA put the enterprise value of JPL at $133 billion, $135 billion and $127 billion, respectively, according to their analyst reports issued on Monday, and seen by Business Standard. JPL is the holding company of Reliance Jio Infocomm, which fully owns the number one telco in the country.

“Based on our valuation and Sebi’s recent proposal for reducing stake dilution limit to 2.5 per cent, JPL’s IPO could be the largest in India with a size of ₹300 billion (₹30,000 crore). We believe the value creation through the JPL IPO could offset the negative impact of a theoretical holding company discount for RIL’s stake in JPL,” said analysts at MOSL in a note following RIL’s AGM last week where chairman and managing director (CMD) Mukesh Ambani announced that preparations were underway for the IPO by June 2026.

Jio Platforms had received investments totalling ₹152,055.45 crore or $20 billion back in 2020, where it sold 32.97 per cent stake to more than two dozen investors led by Meta (then Facebook), Google, KKR, PIF and Mubadala. RIL holds 67.03 per cent of JPL, and the public listing would provide an exit to many of the investors, industry insiders said.

While the listing plans bring forth a much awaited market valuation of Reliance Jio, it will also raise the discussion on assigning a holding company discount as the business becomes directly investible, brokerages added. That’s because the brokerages believe RIL shareholders are unlikely to get any direct shares of Reliance Jio.

“We value RJio business at $133bn implying 13x FY27 estimated EV/Ebitda. We believe the debate on a holding company discount, due to potential listing of the telecom vertical, will be back in play,” said Morgan Stanley in a note.

Analysts at Citi said that while the listing will unlock value, it may not result in a substantial holding company discount owing to Sebi’s recent proposal to reduce the minimum public offer size from 5 per cent to 2.5 per cent, for IPOs of companies having market capitalisation of more than $57 billion.

“It removes a key liquidity hurdle for Jio’s potential IPO ($3bn+ of share supply), which we believe the Indian market can absorb. And it limits holding company discount concerns for RIL post listing of Jio given lower float,” they added. Jio could look at offloading 5 per cent stake through the public listing, according to a Bloomberg report earlier this month.

Analysts noted that the key element to watch out for would be the value unlocking that RIL would see from the Jio listing and impact from hold-co discount post listing.

“Currently in our SOTP (sum of the parts valuation) we ascribe a 5 per cent hold-co discount. The hold-co discount is low as investors can’t invest directly in retail or telco business. However, post the potential Jio listing, as investors could directly invest there, we expect hold-co discount to increase,” said analysts at BofA Global Research.

“While Jio may attract higher value, RIL shareholders may not benefit hugely due to holdco valuation discount,” said analysts at Nuvama in a report dated August 31.

“This may not be ‘value unlocking’ anymore as Street valuations for Jio in RIL’s SOTP seem to have been marked to market to peer multiples already. Yet, the probability of higher tariffs into the IPO increases, which could be a catalyst for the RIL stock,” said analysts at JP Morgan Asia Pacific Equity Research.

Better earnings may trigger the next round of tariff hikes, some of the brokerages mentioned.

“Jio’s IPO in the first half of CY26, may drive further tariff interventions which along with FWA and scale up enterprise business will support growth. Sale of 5G tech to overseas clients may offer further upsides,” said analysts at Jefferies in a note.

However, while Jefferies also noted that Jio’s IPO could lead to potential holdco disc in RIL, it has kept the price target unchanged as Jio could rerate in run-up to IPO.

“Acceleration in Jio’s earnings growth to 23 per cent as our telecom team expects another tariff hike in 2H (July-December),” said Goldman Sachs in a note to clients dated September 1.

We believe this increases the possibility of a tariff hike of about 15 per cent in the telecom business by Nov-Dec’25 and hence is likely to be positive for RIL and Bharti, analysts at JM Financial said.