Upcoming Reliance Group IPOs: Two IPOs Lined-Up

Reliance Industries (RIL) has been at the forefront of India’s economic growth, and its upcoming initial public offerings (IPOs) are generating significant interest among investors. This article provides a detailed analysis of the anticipated from the Reliance Group IPOs, focusing on Reliance Jio and Reliance Retail, along with insights from industry experts.

Mukesh Ambani was widely expected to announce a timeline for the listing of Reliance Retail IPO and Reliance Jio IPO during Annual General Meeting (AGM) of Reliance Industries. While the chairman did not offer any specific timeline for the public listing of the two companies, it is widely believed that both companies will be listed in stock exchanges. A subsequent report by Reuters quoted unidentified persons with knowledge of the matter that Reliance Jio will be the first to be listed on stock exchanges and it could happen as soon as 2025.

The momentum of the IPO is gaining strength as prominent players join the wave. Recently, the Tata Group announced plans to list five of its companies, boosting market optimism. Additionally, another major conglomerate, Reliance Industries, stands out as a key contributor in what is shaping into one of India’s busiest years for IPOs. Reliance Group IPOs are from different industries. Let’s take a closer look at which companies these are:

#1 Reliance Jio Platforms: Foremost of the Upcoming Reliance Group IPOs

Reliance Jio Infocomm, a wholly-owned subsidiary of Jio Platforms, operates the group’s telecom services, delivering voice and data services to over 479 million customers across India. It is currently the largest telecom provider in the country. RIL aims to list its subsidiary Jio Platforms, which houses the country’s largest telecom company, in 2025, two people familiar with the development said.

According to a Reuters report, RIL chairman Mukesh Ambani is planning to list his telecommunications company Jio Platforms on the stock exchanges by 2025. Analysts value the company at more than USD 100 billion, although there hasn’t been any internal decision yet on Jio’s valuation. In July, Jefferies had pegged the firm’s estimated IPO valuation at USD 112 billion.

Reliance has clarified that Jio Platforms will not undergo a demerger like Jio Financial Services did; instead, it will be introduced as a fresh listing. “It has been decided that Jio Platforms will remain a subsidiary and is planned for a market listing in 2025,” a source familiar with the matter confirmed.

A second source familiar with the ongoing discussions shared that while the IPO would provide an exit opportunity for existing investors, most of their holdings are expected to stay categorized as non-promoter shares. Currently, Reliance Industries holds a 67% stake in Jio Platforms, with the remaining shares held by investors, including private equity firms.

In 2020, strategic investors like Meta and Google acquired an 18% stake in Jio Platforms, while private equity players such as KKR, Silver Lake, and Saudi Arabia’s Public Investment Fund secured 15%, collectively investing around INR 1.5 trillion. Recently, Jio also partnered with tech giant Nvidia, a global leader in AI processors, to develop AI data centers across India.

Key Factors Influencing the IPO:

• Market Position: Jio has been leading in tariff hikes while maintaining competitive pricing for feature phones, indicating a robust monetization strategy.
• Investor Preferences: Institutional investors favor a spin-off over an IPO to mitigate the holding company discount often associated with conglomerates in India.
• Strategic Considerations: The decision between pursuing an IPO or a spin-off will depend on how RIL aims to unlock value while maintaining control over its subsidiaries.

Read Also: Tata Capital IPO – Another Tata Group IPO in Sight Amid Regulations

#2 Reliance Retail Ventures: Anticipated Developments

Alongside Jio Platforms, Reliance Retail is also on the radar for a potential IPO. Analysts noted that RIL had previously planned to list these units within five years from 2019, making 2024 critical for announcements. Reliance is currently considering not listing its retail unit in the same year as Jio, as it wants to avoid launching two major IPOs around the same time, according to both sources. The public offering for Reliance’s retail division is anticipated to take place after 2025, as certain operational matters still need to be addressed.

One source noted that there are “operational issues” within the retail division that Reliance aims to resolve before moving forward with an IPO. The division currently operates India’s largest network of 3,000 grocery supermarkets.

Market Expectations:

• Growth Potential: Mukesh Ambani had highlighted that both Jio and Retail are expected to double their revenues and earnings before interest, taxes, depreciation, and amortization (EBITDA) over the next 3-4 years.
• Investor Interest: Any positive news regarding pricing or investor interest during the AGM could significantly impact RIL’s stock price.

Financial Performance and Strategic Initiatives

RIL continues to demonstrate strong financial performance, supported by ongoing investments across multiple sectors, including digital services and new energy projects. The company has allocated significant capital to renewable energy initiatives, which are expected to enhance its traditional oil-to-chemicals (O2C) business.

1. Investment in New Energy: RIL had allocated INR 75,000 crore for renewable energy projects over recent AGMs, including establishing facilities for solar manufacturing and green hydrogen production.
2. 5G Rollout and Monetization: The rollout of Jio’s 5G network is gaining momentum, with updates on subscriber growth and revenue strategies expected soon. Analysts anticipate these developments will enhance investor confidence in RIL’s long-term growth trajectory.

Market Reactions and Future Outlook

The market will closely monitor responses to potential IPO announcements. Analysts believe that if RIL provides concrete timelines or strategic plans during its AGM or other communications, it could lead to a positive rally in stock prices.

• Historical Performance: RIL’s past performance indicates that significant announcements often correlate with upward movements in share prices. For instance, after announcing Jio Financial Services’ listing, its market capitalization reached approximately INR 2.2 lakh crore shortly after going public.
• Investor Sentiment: Positive sentiment surrounding Jio’s growth and retail expansion could attract both domestic and foreign investors, further bolstering RIL’s market position.

Read Also: Upcoming Tata Group IPOs in 2024

Conclusion

The upcoming Reliance IPOs of Jio Platforms and Retail Ventures are set amid a period of robust financial performance and strategic growth initiatives. As investors anticipate further clarity on timelines and valuations, the potential effect on Reliance Industries‘ share price remains a key focus for market watchers. RIL is positioned to maintain its leadership in India’s economic landscape. Both IPOs offer substantial opportunities for investors to tap into Reliance Group’s expansive growth across digital services and retail.

India’s red-hot IPO market saw as many as 70 mainboard listings in 2024 so far, with average returns of 29.50% on the first day of public trading. Given this backdrop, it is not wrong on the investors’ part to eagerly anticipate these upcoming Reliance Group IPOs.

Read Also: Top 10 AC Brands in India