Jio Platforms cuts valuation to $108 billion ahead of India IPO — CNBC
Indian telecommunications and digital company Jio Platforms has cut its valuation to about $108 billion ahead of its initial public offering, which is set to open on October 21. CNBC reports that the IPO could raise up to 302 billion rupees, or nearly $3.2 billion, at a price of 1,065 to 1,119 rupees per share.
Previously, the market had discussed a valuation of Jio Platforms of more than $130 billion. According to calculations by brokerage firm Nomura, Jio’s enterprise value fell to $118 billion from the previously expected $133 billion.
Valuation below that of a competitor
Jio’s equity valuation of $108 billion is lower than the market capitalization of Bharti Airtel, India’s second-largest telecommunications operator, which LSEG estimates at more than $117 billion.
Nomura noted that after listing, Jio will have to demonstrate growth to public shareholders. Analysts believe the period of easy subscriber growth is coming to an end, while tariff increases could become the main driver of profit growth.
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In its IPO documents, Jio stated average revenue per user of 214 rupees, or $2.25, per month. At Airtel, this figure was 257 rupees for mobile services, 527 rupees for home internet and 158 rupees for digital television.
Bet on technology and satellite communications
Jio Platforms plans to use 275 billion rupees of the raised funds to repay the debt of its telecommunications business. Counterpoint Research partner Neil Shah believes this should free up internal cash flows for the next stage of growth, including investments in gigawatt-scale green artificial intelligence infrastructure and a low-Earth-orbit satellite network.
Mukesh Ambani said at the annual shareholders’ meeting in June that Jio must demonstrate India’s ability to create technology companies on a global scale. At the same time, Ansid Capital founder Anurag Singh told CNBC that the company currently lacks sufficient product expertise to position itself as a technology business. Shah also noted that Meta and Google, which hold nearly 10% and 8% stakes in Jio respectively, are not exiting their investments through the IPO.
