Billionaire Mukesh Ambani is reportedly preparing an initial public offering (IPO) for his telecom venture, Reliance Jio, slated for 2025. Following this, an IPO for Reliance Retail is anticipated, although it will come at a later date. According to sources cited by Reuters, this IPO could potentially surpass Hyundai India’s record $3.3 billion IPO, marking it as one of the largest in Indian history.
Analysts currently value Reliance Jio at over $100 billion, attributing its IPO plans to the company’s robust business model and revenue stability. As India’s leading telecom provider with 479 million subscribers, Jio’s growth trajectory supports this valuation. Although an official valuation decision is pending, investment bank Jefferies had estimated Jio’s worth to be around $112 billion as of July this year.
Competitive Landscape and Recent Investments
The IPO development arrives amid mounting competition, particularly as Reliance Jio prepares to face off against Elon Musk’s Starlink internet service, pending its launch in India. Additionally, Ambani has successfully raised $25 billion for his telecom, digital, and retail enterprises from notable investors, including KKR, General Atlantic, and the Abu Dhabi Investment Authority. Jio Platforms, which encompasses Jio’s telecom and digital sectors, has seen 33% of its equity acquired by foreign investors after raising $17.84 billion in recent years.
Future Plans for Reliance Retail
The IPO for Reliance Retail, which manages India’s largest grocery network with 3,000 supermarkets, is expected to be launched after 2025. This delay is attributed to “operational issues” within the retail division, which Ambani’s team intends to address before proceeding with an IPO. Moreover, to avoid overwhelming the market with two significant IPOs simultaneously, Reliance aims to focus on stabilizing its retail operations first.
Challenges in Retail Growth The operational challenges facing Reliance Retail stem from its rapid expansion, which included entering the e-commerce space to compete with Amazon and adopting quick commerce models for 10-minute deliveries. This swift growth has resulted in losses for some physical stores, leading the company to report a 1.1% decline in sales for the July-September quarter. Despite these challenges, Bernstein valued Reliance Retail at $112 billion last year.