Indian billionaire Mukesh Ambani is targeting a 2025 listing of his telecom company Jio in Mumbai, which analysts value at more than $100 billion (about Rs 8,41,090 crore), and plans to launch the IPO of his retail unit much later, according to reports. Two people familiar with the matter said. Reuters.
Ambani, the Reliance Industries chairman, has not updated IPO timelines after saying in 2019 that Reliance Jio and Reliance Retail would be “moving towards” a listing within five years.
In recent years, Ambani, Asia’s richest man, has raised $25 billion (about Rs 2,10,272 crore) collectively for digital, telecom and retail companies from the likes of KKR, General Atlantic and Abu Dhabi Investment Authority, valuing both ventures at more than $100. Billion (about Rs 8,41,090 crore).
Reliance has now confirmed its plans to launch an IPO for Reliance Jio in 2025, as it internally believes it has achieved stable business and revenue stream to become India’s No. 1 telecom operator with 479 million subscribers, the two sources said.
The first source said that the retail IPO is not expected until after 2025 as the company first needs to address some internal business and operational challenges.
Reliance Industries, which operates in the oil-to-retail business, did not respond to a request for comment.
Reliance Jio is set to compete with Elon Musk if he launches his Starlink internet service in India, and Jio, also backed by Google and Meta, has partnered with Nvidia to develop artificial intelligence infrastructure.
There has been no internal decision yet on Reliance Jio’s valuation and bankers have not been appointed yet, sources said, but Jefferies in July pegged the company’s estimated IPO valuation at $112 billion (about Rs 9,42,021 crore).
Reliance is aiming for its 2025 IPO to be India’s largest ever, surpassing Hyundai India’s record IPO of $3.3 billion (about Rs 27,756 crore) this year, the first source said.
The IPO timelines are still subject to change, said the two sources, who requested anonymity because the discussions are private.
Indian markets recently hit record highs, and by October, 270 companies had raised $12.58 billion (about Rs 1,05,809 crore) from Indian IPOs this year, surpassing the $7.42 billion (about Rs 62,408 crore) raised in the whole of 2023.
Retail repairs required
Reliance’s current thinking is not to list the retail unit in the same year with JIO, as it does not want to hit the market with two large IPOs around the same time, the two sources said.
More importantly, the first source said, there are “operational issues” Reliance internally wants to fix at its retail unit, which runs India’s largest grocery store network of 3,000 supermarkets, before going for an IPO.
The company has grown “too quickly” and ventured into various retail formats, including e-commerce, and some of its brick-and-mortar stores have posted losses over the years resulting in less-than-ideal profits per square foot of space, the person said. .
The Reliance Retail empire includes fashion, grocery and electronics stores, and it has ventured into e-commerce in recent years to compete with Amazon. It is now expanding to include faster deliveries to capitalize on the boom in express commerce – a new wave of shopping where products are delivered in 10 minutes.
It reported a 1.1 percent year-on-year sales decline in the July-September period, the first drop in quarterly sales in at least three years, as competition from fast-trading startups is expected to eat into its share of supermarket sales.
Bernstein last year valued the company, which owns toy retailer Hamleys and has forged partnerships in India with brands such as Jimmy Choo, Marks & Spencer and Pret A Manger, at $112 billion (about Rs 9,42,021 crore).
Jio Platforms, which houses telecom and digital businesses, is 33 percent owned by foreign investors after raising $17.84 billion (about Rs 1,50,050 crore) in recent years. Reliance Retail sold about 12% of its shares to foreign investors during the same period and raised $7.44 billion (about Rs 62,577 crore).
© Thomson Reuters 2024
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