Reliance Industries (RIL) is planning to list its telecommunications arm Reliance Jio on the stock exchanges if the telecom firm’s plans to turn profitable by the end of this fiscal bear fruit.
“IPO plans will be spelt out only after Reliance Jio completes a full year of financial reporting with visible profits. No doubt, it will be India’s biggest,” sources close to the development told The Hindu. The IPO is being planned for the end of 2018 or early 2019, the sources said. Reliance Jio had posted a net loss of ₹270.59 crore on revenue of ₹6,147 crore for the quarter ended September 30, 2017.
Coal India had raised more than ₹15,000 crore in 2010 diluting 10% stake in the company, making it India’s largest public offering at the time.
Mr. Ambani has directed investments of more than ₹2 lakh crore in Reliance Jio, which disrupted the Indian mobile telephony market. When asked for comments, a spokesperson for Reliance Industries said the information was speculative and as a policy, it did not comment on ‘media speculations and rumours’.
RIL is now India’s most valued firm with market capitalisation of Rs 5,79, 547 crore.
“Reliance Jio IPO will ensure that it over takes market capitalisation of Bharti Airtel, now over Rs 2 lakh crore. So, Mukesh Ambani will be no hurry. His first aim now is to get a larger market share and turn profitable before Jio’s listing. To get a market cap of over 2 lakh crore by diluting 10% stake, the IPO size could be well over Rs 20,000 crore,” investment advisor S P Tulsian told The Hindu.
Reliance Jio will sell a minority stake to strategic investor to the likes of AT&T to set the floor price for the Jio offering, said another source in the know of the development requesting anonymity.
“Reliance will be coming out with an public issue after over a decade looking at the kind of returns the management has made for RIL shareholders, it will be most sought after IPO by the retail investors and the valuations will have to be seen given the company has invested Rs 2 lakh crore in Jio rollout. The company may sell minority stake to strategic partner like Reliance Petroleum had sold sold 5% stake to Chevron Corp ahead of it's listing in 2006,” Paras Bothra, head of Equity Research at Ashika Stock Broking told The Hindu.
RIL shares on BSE closed down marginally at ₹915 in a weak Mumbai market on Tuesday, valuing the company at ₹5,79,547 crore.