Reliance Industries is now looking to list its digital and wireless assets on overseas bourses, said a Bloomberg report citing people with knowledge of the matter. Jio Platforms Limited – a wholly owned subsidiary of Reliance Industries – has been recently in news on account of attracting several top notch investors. While more details about the listing are not known at the moment, Jio Platforms IPO is expected over the next 12 to 24 months.
Earlier, the group was planning a listing of wireless carrier Reliance Jio Infocomm Limited but the latest developments indicate that group leader Mukesh Ambani is eyeing a bigger game with overseas listing and investments by global industry leaders. An overseas listing is likely to fetch higher valuations and better visibility at international stage.
In total, Jio Platforms has attracted more than USD10 billion of investment over the last month. These investors include Facebook, Silver Lake Partners, General Atlantic, and KKR while a similar investment is likely to be made by Microsoft. The investments, amounting to INR78,562 crore (INR785.6 billion), value Jio Platforms at an equity value of INR4.91 lakh crore (INR4.91 trillion) and an enterprise value of INR5.16 lakh crore (INR5.16 trillion).
Jio Platforms houses wireless carrier Reliance Jio Infocomm Limited and combines the group’s other digital assets. Established in 2016, Reliance Jio Infocomm has emerged as India’s leading telecom operator with 387.5 million subscribers as of 31 March 2020.
Overseas is the only option for Jio Platforms IPO
Over the last five years, Mukesh Ambani has turned Jio into a behemoth by deploying massive capital and undercutting competition in both data and voice. At the current equity valuation of INR4.91 lakh crore, even a 5% share offering will result in Jio Platforms IPO size of INR24,550 crore. This is enough to suck significant liquidity out of the system and may also create unnecessary selling pressure after listing. As such, overseas listing is the only viable option for Jio Platforms.
It is important to note that India’s largest IPO was of Coal India which mobilized INR15,200 crore in 2010. While Coal India IPO gave good returns, investors are still wary of large offerings and often cite the example of Reliance Power IPO which saw massive selling pressure in post-listing days.
