Reliance Shares Set to Soar: Jio Might Go Public by 2025, Says Jefferies

Reliance Industries’ share price has gone up 22% this year, partly because of positive news and analyst expectations about its telecom arm, Jio.

Jefferies India Ltd reports that Jio could be valued at $112 billion if it goes public. If Jio is spun off from Reliance Industries, Reliance shares could reach ₹3,580, which is a 15% increase. If Jio is listed through an IPO, Reliance shares could be valued at ₹3,365, considering a 20% holding company discount.

Jio’s Possible Public Listing in 2025

Jefferies believes Jio’s recent tariff hikes and market share gains make a public listing possible in 2025. Reliance might choose to list Jio through an IPO or spin it off, as it did with Jio Financial Services.

IPO Route vs. Spin-off Route

IPO Route:

• Reliance might list 10% of Jio, fulfilling IPO requirements.
• An IPO could involve selling shares by minority stakeholders.
• A 35% retail segment in the IPO requires significant investor interest.
• Stock markets might apply a 20-50% holding company discount.

Spin-off Route:

• No holding company discount is applied, enabling better value for Reliance shareholders.
• Reliance shareholders would receive a proportionate shareholding in Jio.
• Owners’ stake in Jio would fall to 33.3% after listing.

Preference for Spin-off Route

Investors seem to prefer the spin-off route for Jio’s potential listing, which could benefit Reliance shareholders more. After the spin-off, Reliance could address the lower controlling stake by buying shares from private equity funds.