Reliance Jio Listing: The telecom company Jio of Reliance Industries Limited, owned by the country’s richest industrialist Mukesh Ambani, may be listed on the stock exchange by 2025. Global brokerage house Jefferies has issued a research note regarding Reliance Industries in which these things have been said. The brokerage house said that there is a greater possibility that the promoters may demerge Jio from the parent company and list it on the stock exchange.
The impact of Jio’s listing will be visible on RIL’s stock.
According to Jefferies, if Jio is listed on the stock exchange, the company can get a valuation of $ 112 billion. If Jio is listed separately from Reliance Industries, then the company’s stock can go up to Rs 3580, which means investors are likely to get a return of 15 percent from the current level. In today’s trade, after this report, Reliance stock is trading at Rs 3194.40 with a rise of 0.87 percent.
Will Reliance Jio’s IPO come?
In its report, Jefferies has tried to explore the possibility that Jio will be listed on the stock exchange by issuing an IPO or Jio will be listed by separating it from Reliance Industries. Regarding this, Jefferies has released a research report titled ‘Possible listing of Jio – through spin off or IPO’. In this report, regarding the listing of Jio through IPO route, it was said that there is 33.7 percent minority shareholding in Jio which fulfills the requirements of IPO, in such a situation Reliance can list 10 percent stake. Also, Jio has moved beyond its capex phase, so the entire IPO may be an offer for sale by minority shareholders.
In IPO, 35 percent share has to be reserved for retail investors, in such a situation, there will be a need for large participation from retail investors in IPO. And the retail portion which could not be subscribed can be allotted to institutional and non-institutional investors. With this, Reliance Industries will retain majority controlling stake in Jio.
In this note, Jefferies said, the way Jio has taken the initiative in increasing mobile tariffs, it is clear that the company is focused on monetization and increasing the market share of subscribers. According to the report, after the mobile tariff hike, the possibility of public listing of Jio in 2025 has increased. Jefferies said, Reliance Industries can list Jio on the stock exchange through Jio’s IPO or by demerging Jio Financial Services in 2023, in the same way, by separating Jio from Reliance Industries.
Jio will demerger from Reliance
According to Jefferies, if a separate Reliance Industries Limited decides to demerger Jio by separating it from the parent company, then after price discovery, Jio can be listed on the exchange as was seen in the case of Jio Financial Services. Reliance Industries shareholders will be allotted Jio shares in proportion to the Reliance shares held by them. This will avoid discounts from the holding company and will also help in unlocking better value for the shareholders of Reliance Industries. After listing, promoter holding will reduce to 33.3 percent. However, on the listing of Jio Financial Services, the promoter stake came down to 45.8 percent.
After the strong performance of the stocks of Reliance Industries and Jio Financial Services, it seems more likely that the promoters may spin off Jio from the parent company and list it on the stock exchange.
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