Reliance Jio IPO: CLSA says listing will be 'mega event'; pegs $128 bn valuation as growth accelerates

Reliance Jio’s upcoming stock market debut could reshape India’s telecom sector, with financial services firm CLSA calling it a “mega event” that may also trigger a rerating of Bharti Airtel. The brokerage underlined that Jio, which commands a subscriber base of over 500 million across 4G and 5G networks, holds 42 per cent market share and continues to expand aggressively.Reliance Industries Chairman and Managing Director Mukesh Ambani had announced on August 29 that Jio will file for its long-anticipated initial public offering (IPO), with plans to list by the first half of 2026, subject to approvals. Against this backdrop, CLSA released a detailed report tracking Jio’s progress over the past decade and its potential ahead.According to CLSA, Jio has achieved $13 billion in revenue and $7 billion in Ebitda, and is valued at $128 billion EV on 13x EV/Ebitda in Reliance’s SOTP. “We expect Jio's rising ARPU will drive 50-60 per cent growth in revenue and Ebitda to $19-11 billion by FY28CL,” it said, noting that the company has employed capital worth $51 billion so far.The report added “The Jio IPO will be a mega event and a rerating trigger for Bharti, in our view. Jio and Bharti are two of the most direct ways to invest in India's digitalisation and offer a highly favourable risk-reward.”Jio’s average revenue per user (ARPU) currently stands at Rs 209, up 63 per cent since tariff hikes began, though still 17 per cent lower than Bharti Airtel. The company commands an all-India revenue market share of 42.3 per cent, followed by Bharti at 39.2 per cent, reflecting its strong network execution.In the residential broadband business too, Jio leads with 20 million subscribers across Jio Fiber and Jio AirFibre (5G FWA), aiming to scale to 100 million homes, compared with Bharti’s 11 million. Jio’s 4G/5G base continues to grow rapidly, with 5G now accounting for 42 per cent of its total subscribers.Jio has also led tariff hikes in the sector. In July 2024, it increased prepaid tariffs by 13-25 per cent and raised its entry post-paid plan by 17 per cent to Rs 349. The threshold for accessing 5G services was raised from 1.5GB/day to 2GB/day at the same Rs 349, amounting to a 46 per cent increase.On Reliance Industries overall, CLSA noted “Flow-through of recent tariff hike for Jio, recovery in retail’s growth momentum and Jio Airfiber led positive momentum in broadband subscribers should drive improvements. Start of new energy projects and possible IPO of Jio are other triggers over next 12-15 months.”