Mukesh Ambani’s Reliance Jio Infocomm Ltd(RJIL), the telecom arm of Jio Platforms Ltd is gearing up for its highly anticipated IPO in 2025. The Reliance Jio IPO is expected to be one of India’s largest IPO, with its valuation target exceeding ₹10 lakh crores ($120 billion).
- As per early reports, Reliance Jio could raise over ₹40,000 crores from this historic IPO listing.
- The IPO debut is expected to be in the second or third quarter of 2025.
- The IPO is predicted to be a combination of fresh share sale and an offer-for-sale (OFS) from the promoters and existing shareholders of the company.
- The company may also have a pre-IPO placement clause in its issue.
All you need to know about Reliance Jio Infocomm Ltd(RJIL)
As of October 2024, Reliance Jio is the largest telecom operator in India with 460 million wireless subscribers. Reliance Jio Infocomm Limited (RJIL) is a subsidiary of Reliance Industries Limited (RIL) with over 10,000+ professionals as a part of its national team. For FY 2023-24, Reliance Jio Infocomm had an operating revenue of ₹1,00,119 crores i.e an increase of 10.3% Y-o-Y from previous year’s revenue of ₹90,786 crores. As per RJIL’s company report for FY 2023-24:
- The company now has the largest 5G subscriber base for any operator outside China.
- RJIL added over 42 million subscribers (net) out of the total subscriber base of 481.8 million
- 108 Million+ subscribers have migrated to Jio’s 5G network.
- With over 2.8 million AirFiber connections, Jio is the fastest growing fixed wireless operator globally.
- Foreign investors own about 33% stake in Jio Platforms that owns Rjio.
Strengths and Challenges for Reliance Jio
Strengths of Reliance Jio Infocomm
- Market leaders: Reliance Jio is the largest telecom operator in the country with 460 million wireless subscribers, as of October 2024.
- Partnership with Nvidia: Ambani has been looking to disrupt the AI space with innovative solutions. Reliance Jio platforms recently announced its partnership with the global technology giant Nvidia to develop AI language models, which could give Reliance Jio a competitive edge over its other competitors.
- License Approvals: RJIL has also obtained regulatory approval to launch satellite internet services, which could contribute significantly to its revenue stream.
- Diversification: Over the last 5 years, RJIL has spent close to $3 billion in acquisitions for its telecom, internet and digital businesses which could prove to be fruitful in the long-term.
Challenges for Reliance Jio Infocomm
- Dipping Returns: RIL, Reliance Jio’s parent company has seen a dip of 3.29% in returns, over the last 1 year.
- Loss of subscribers: As per TRAI, the company lost close to 1.65 crores subscribers over four months since the tariff hike in June 2024.
Competitors for Reliance Jio Infocomm
1. Bharti Airtel Limited: Airtel ranks amongst the top three mobile service providers globally in terms of subscribers. As of 8th January 2025, the company’s market share stands at ₹9,56,993.70Cr .
- Bharti Airtel(BHARTIARTL) reported a net profit of ₹7,753 crore for H1 FY25, exceeding last year's total.
- Airtel is enhancing its network infrastructure in Prayagraj for the Maha Kumbh, while also transitioning to fiber and gaining subscribers.
- Despite user losses due to pricing, Airtel remains a strong performer in the telecom sector with significant 5G user growth.
2. Tata Teleservices (Maharashtra) Ltd: . Incorporated in 1996, the company is headquartered in Mumbai and offers a wide range of telecom services such as mobile services, broadband, enterprise solutions, and value-added services. As of 8th January 2025, its market share stood at ₹15,526.05Cr.
- Mutual Funds have increased holdings from 0.07% to 0.08% in Sep 2024 quarter
- Recently, the Tata Teleservices(TTML) stock has underperformed, declining 6.18% over the past month compared to the Sensex's 4.29% drop.
3. Vodafone Idea: Commonly known as Vi, Vodafone Idea is a prominent player in India's telecommunications sector. Incorporated in 1996, Vi offers a wide range of services, including mobile voice and data services, broadband internet, and enterprise solutions, catering to individual consumers and businesses across India. As of 8th January 2025, its market share stood at ₹57,641.75Cr.
- Vodafone Idea's parent companies are Vodafone Group Plc and Aditya Birla Group, which hold significant stakes in the company.
- Vodafone Idea(IDEA) is addressing competition with new annual recharge plans and preparing for a 5G launch in March 2025.
- As on 6th January 2025, Vodafone Idea stock fell 3.87%, underperforming against the Sensex.
4. BSNL: Bharat Sanchar Nigam Limited is a 100% Govt. of India owned Public Sector Undertaking, under the ownership of Department of Telecommunications, which is part of the Ministry of Communications. BSNL has a customer base of 1,079.77 Lakh subscribers. BSNL also provides Wireless Broadband Services on 3G & 4G, with over 212 lakh 3G+4G connection subscribers, as of May 2023.
Future of India’s booming telecom industry
India is one of the biggest consumers of data worldwide. As of October 2024, the total telephone subscriber base stood at 1,188.20 million with tele-density of rural subscribers at 44.42%.
- The export of mobile phones in FY24 has increased by 42% touching a value of US$15.6 billion!
- India's 5G subscriptions are estimated to be 350 million by 2026, accounting for 27% of all mobile subscriptions.
- By 2025, India will need close to 22 million skilled workers in 5G-centric technologies such as Internet of Things (IoT), Artificial Intelligence (AI), robotics and cloud computing.
- ₹116,342 crores was allocated to the Department of Telecommunications and IT in the Union Budget 2024-25.
Considering the recent developments in the 5G space and strategic investments by global players, this is surely an exciting time for the telecom industry in India.
About Reliance Industries(RIL) and its share price
Founded by Dhirubhai Ambani in 1966, Reliance Industries Limited (RIL) is a major conglomerate in India. RIL operates in various sectors including:
- petrochemicals
- refining
- oil and gas exploration
- retail
- telecommunications
- digital services, and more!
Listed on the Indian stock markets on 3rd November 1994, Reliance is one of the first companies in India to have started the equity revolution. Reliance is known to have consistent returns to its shareholders and investors. As of 07th January 2025, its market capitalisation stands at ₹16,93,102.37Cr with a per share price of ₹1240.85. RIL is also the first listed Indian company to cross the ₹20 Lakh crore milestone.
Conclusion
With Reliance Jio’s IPO predicted to be one of India’s largest, this is a very interesting time for the telecom industry. For investors, this development presents potential opportunities but also calls for careful evaluation. It’s crucial to assess the market happenings and performance for both Reliance Jio and RIL both before making investment decisions.
Disclaimer
This blog is for general/educational information purposes and is no way to be considered as advice, or recommendation for investment or otherwise. Investment in securities market are subject to market risk, read all the documents carefully before investing. The securities quoted are exemplary and not to be considered as any kind of advice or recommendation. The past performance of the stocks are not necessarily indicative of future performance. INDmoney Private Limited 616, Level 6, Suncity Success Tower, Sector 65, Gurugram, 122005, SEBI Stock Broking Registration No: INZ000305337, Trading and Clearing Member of NSE (90267, M70042) and BSE, BSE StarMF (6779), SEBI Depository Participant Reg. No. IN-DP-690-2022, Depository Participant ID: CDSL 12095500.
Source
Reliance, Reliance Jio, India Brand Equity Foundation, The Hindu Business Line, Business Standard