According to a report by The Hindu Business Line, billionaire Mukesh Ambani’s Reliance Industries is in discussions and debates over which company will go public first. And it added citing sources that it is highly likely that Reliance Jio Infocomm will be the first to debut in the public market ahead of other companies.
While discussions are still in the early stages, the paper’s sources said top officials favoured the telco’s debut on the public market, adding that they see it as a “more mature” company.
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Expected Valuation of $ 100 B
They added that Reliance Industries (RIL) is exploring a possible valuation of around $100 billion at a share price of around INR 1200 per share. The IPO includes a substantial offer for sale (OFS) component, the paper reported.
Analysts value Jio at $82 billion to $94 billion, it adds, with an expected increase in mobile tariffs later this year adding to those estimates. RIL did not respond to questions, it said.
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IPO to provide exit option to early investors
Jio, which was launched in 2016 and gained a huge subscriber base thanks to its pricing strategy, is reportedly delaying plans to go public in 2020 as 13 foreign investors invest about $57 billion to $64 billion, according to a report. These investors included Meta (9.9 percent) and Google (7.73 percent). Now, an important factor influencing this decision is the possibility of an exit from private equity (PE) funds and other investors, who have invested more than $20 billion in 2020, the report added.
The report also noted that telecommunications is an expensive business due to acquiring spectrum and building infrastructure. He added that Jio’s recent focus on 5G has seen most of its INR 53,000 crore investment going towards that launch. RIL plans to reduce capex, with most of the funds coming from internal restructuring, it said.
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About Author
This article has been covered by Ms. Swara Kekatpure, a finance student at NMIMS University, Mumbai. She carefully analyses businesses in detail and ensures her work incorporates honesty, integrity, and unwavering dedication.
