Jio Platforms IPO: strong history, but is the valuation justified?

what happened

TradingView analysts review the Jio Platforms IPO and describe it as one of the most significant offerings in India's history. The company is issuing entirely new shares, 27 crore in total, within a price band of 1,065 to 1,119 rupees per share. At the top of the band the offering would raise 30,213 crore rupees, which the company plans to use to repay borrowings and for general corporate purposes.

After the issue, Jio's market capitalisation would reach 10.3 lakh crore rupees, placing it fourth among India's listed companies behind Reliance Industries, HDFC Bank and Bharti Airtel. On trailing twelve-month earnings, the P/E multiple is about 32.5 before the issue and 33.5 after it, while EV/EBITDA is roughly 14.4.

why it matters

Jio's core business is mobile services and fixed broadband, which together generate about 85% of its revenue, so the valuation depends largely on the mobile segment. Reliance Industries owns 66.43% of Jio, so the outcome of the offering also matters for its shareholders. High multiples and reliance on mobile revenue make the valuation sensitive to tariffs and competition.

market impact

Reliance Industries: the IPO-based valuation of Jio affects RIL shares; Bharti Airtel: competition in India's mobile market

tags

instruments