ARTICLE AD BOX
New Delhi: The eagerly awaited IPO of India’s Reliance Jio has been again turned into a big talking point as Reliance Industries Chairman Mukesh Ambani has refused to provide a direct comment on the plans surrounding the listing. No clarity was expected by investors and market watchers, and Ambani said only that the company is “evaluating strategic pathways” for Jio’s future growth.
There is one question that has been doing the rounds of everyone that has been simply not addressed why has Reliance yet to announce the new timeline for the Jio IPO?
One of the key growth drivers for the company has been its digital arm, Jio Platforms, over the past few years. The telecom and tech giant already has over 500 million subscribers and is well-supported by investors like Meta, Google and others from around the world.
Reliance has long been anticipated to be one of the largest Indian Initial Public Offerings to come through Jio Platforms over the years. The IPO has been rumored to be valued at nearly $180 billion and raise close to $4 billion for the company. But the latest concept Ambani has released, apparently, is that Reliance is still playing it safe.
Rather than announcing a launch date, Ambani said the company will “continue[ to look] at options in the interest of Jio’s “long-term growth” and “sustainable value creation.” It indicates that while the Reliance IPO is under review, experts say the company is not in a rush to go public at this point, but is taking the time to pick a suitable time and arrange for the structure of the offering. The first and foremost reason could be because of uncertainty in the international markets. There is no new indication that geopolitical tensions, such as the ongoing Iran-related crisis, have had an impact on investors’ sentiment all over the planet. Some investors may not be eager to purchase shares in large IPOs during times of market uncertainty; at this point, Reliance may not feel that it wants to be taking chances.
Some other reason might be concerns about valuation. Reliance hopes Jio to launch at a higher valuation as it’s not a mere telecom anymore. Jio is aggressively advancing into many different domains such as Artificial Intelligence (AI), cloud services, digital platforms, fintech, and next generation 5G/6G technologies.
Ambani has indeed consistently described his company Jio as a future technology and AI company, besides being a telecom operator. He revealed that Jio intends to shape the future of India digital, by innovating in connectivity, AI, cloud and digital services in its latest annual report.
This is why Reliance may wish to wait for Jio’s newer companies to get established and profitable themselves before going public. If it has a much healthier financial circumstance, the valuation it may demand during the IPO will certainly be significantly greater. It could also be that Reliance is still in the process of contemplating a total sale, augmenting the private parts, or a separate strategic form. Ambani used the words “strategic pathways”, indicating several other possibilities are being discussed behind-the-scenes.
Buyers are still very optimistic about the market. Ambani may be able to give a more definite update at the Annual General Meeting (AGM) of the company, Reliance Industries, which is due on June 19, reports. The event is expected to be closely monitored by investors for any news related to the Jio IPO timeline.
Currently, Reliance seems to be more interested in building out its tech stack of Jio than selling shares. However investors are set to be disappointed at the wait for a specific date of a listing, the reports said Ambani plans to make an IPO on a date which is entirely suitable for him. For now, the Jio IPO is one of the hottest yet unanswered business stories in India.
English (US) ·