Reliance Industries is planning to take its telecom arm Reliance Jio Infocomm public in 2020. A report by The Economic Times said that the matter has been subject of several meetings between the company executives, bankers and consultants in the last month or so. This is a clear indication that groundwork for Reliance Jio IPO has picked up pace.
Nevertheless, the IPO of the telecom service provider will need to be preceded by securing external investors for the company’s fibre and tower asset companies Jio Digital Fibre Pvt Ltd and Reliance Jio Infratel Pvt Ltd. Reliance plans to monetize these Infrastructure Investment Trusts (InvITs) by roping in investors.
Earlier this month, Brookfield Asset Management was reported to be finalizing an investment in the tower business which is valued at around INR36,000 crore (INR360 billion). Reliance Jio Infratel has a portfolio of 170,000 towers. Reliance Jio has demerged the two businesses and has also transferred a debt of INR1,07,000 crore (INR1,070 billion). Following the move, Reliance Jio’s net debt stood at INR67,000 crore (INR670 billion) at March end.
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A person with direct knowledge of the matter said that Reliance plans to launch its Fibre To The Home (FTTH) network before the IPO. The FTTH rollout will be a highlight for the company ahead of the IPO.
Reliance Jio IPO unlikely before March 2020
Despite the preparations, Reliance Jio IPO is likely to launched only after March 2020. This is because regulatory requirements stipulate a financial reporting history of at least three years. The telecom operator started posting performance figures in March 2017, six months after starting operations in September 2016.
As of 31 March 2019, Reliance Jio had 306.72 million users, placing it behind market leader Vodafone Idea (394.83 million) and Bharti Airtel (325.18 million). However, its revenue market share (RMS) of 31.7% during the quarter trailed only Vodafone Idea’s 32.2%.