Introduction
As you enter India's financial markets, prepare yourself for a potentially transformational experience: Reliance Jio's initial public offering (IPO). Currently scheduled for 2026, this could be India's largest pre-IPO to explore investing in a telecom leader who extends connectivity in unprecedented ways. Following Motilal Oswal's insights, here is what you need to know to prepare for this transformational experience.
Upcoming Record IPO
Have you ever dreamed of being involved in India's largest IPO? Reliance JIO plans to go public in the first half of 2026, according to an announcement made by Mukesh Ambani, Reliance Industries Limited (RIL) Chairman. Motilal Oswal estimates the IPO could raise ₹30,000 crore, surpassing Hyundai India's $3.3 billion raise in 2024. This colossal fundraising stems from JPL's projected equity value of ₹11.9 trillion ($135 billion) and an enterprise value of $151 billion.
Valuation Breakdown
For you, the numbers tell a strong narrative. The 67.03% stake by RIL in JPL is valued at ₹7.91 trillion ($90 billion). Its 67.03% stake, valued at ₹7.91 trillion ($90 billion), reflects Jio's position in telecom and digital services. The proposed SEBI rule could change the minimum required public offer size from 10% to 2.5% for mega-cap firms. The IPO will likely see a minimal stake dilution. The IPO will be an unprecedented event. Jio can be positioned to reinvent India's IPO market and allow you to invest in Jio.
Why Jio's IPO Matters to You
Jio has a track record. It has over 500 million subscribers, is the leader in 5G rollout, and has a successful home broadband segment, acquiring over one million monthly connections. It is adding an upgrade to address its enterprise solutions and possibly 5G technology sales or exports. You can invest in a company driving India's digital revolution, with revenue streams beyond conventional telecom.
Development Factors
Motilal Oswal anticipates that Jio's EBITDA will grow at a 19% compound annual growth rate (CAGR) in fiscal years 2025-2028. The growth will be driven by potential tariff increases, possibly in the region of 15% by late 2025, and growth in fixed wireless access (FWA) and enterprise services. Together, these growth drivers create considerable value through Jio, allowing you to gain high returns in a high-growth area.
Assessing Opportunities and Threats
The IPO provides a significant opportunity for value creation but requires some context and consideration. Generally, after the IPO, JPL becomes eligible for direct investment, and RIL's holding company discount, presently projected at about 5%, may increase as a result. For RIL shareholders, this will dampen some of the upside. Nonetheless, Motilal Oswal thinks that the opportunity to unlock value through the IPO outweighs any downside imposed by increased tracking stock, maintaining its 'buy' on RIL at a price target of ₹1,700/share, which includes ₹585/share for part of RIL's stake in JPL.
Strategic Considerations
Remember JPL's achievement in 2020: it raised ₹1.52 lakh crore from global investors by selling a 33% stake in the company. This IPO allows these stakeholders to exit while showcasing an opportunity for you to invest in a market leader. What is evident, though, is that analysts are closely tracking Jio's next developments, including potential tariff hikes and operational execution risks in an IPO of this size.
Conclusion
In undertaking long-term investment planning for 2026, this IPO of Reliance Jio will be an essential step in your investing journey. It is about raising the most money and participating in a key company for India's digital future. So, you'll want to stay on top of this IPO. Be sure to assess your risk appetite and consider how this prospective IPO might fit into complementing your investment portfolio. Given your investing experience and the experience Motilal Oswal has provided you, you should be in a solid position to leverage this opportunity and potentially be part of the growth story that is India's telecom revolution.
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