India’s largest IPO deserves more attention, and this is not just for its size, but the impact Jio Platforms has had on the digital ecosystem in India. The ‘LTE’ or the ‘long term evolution’ of the Indian mobile telephone market has had many inflexion points and few very notable days, but arguably none as significant as the one on September 1, 2016. As Mukesh Ambani started the 2016 AGM of Reliance Industries (RIL) with announcement of the launch of Reliance Jio’s mobile service, markets started taking note. Over the next one hour as he spoke on the founding vision of Jio to be a key enabler of the digital ecosystem in India and its plans, competitor stocks got crushed (Airtel fell 6.3 per cent, Idea fell 10.5 per cent and it dint end on day one). The banger of a launch had many game-changing announcements. Likening data to digital life as what oxygen is to life, something that should never be in short supply and unaffordable to any user, he unveiled plans that under cut competitors pricing massively and also brought in whole lot of simplicity in pricing of products. Until then, recharging a mobile phone could be a complicated exercise, with myriad plans for different uses, each carrying its own foot notes and caveats. Even well-in formed customers could struggle to navigate the offerings of the various service providers. .Jio brought in unbridled simplicity and also announced users would be charged only for data – voice and messaging will be free and unlimited.

The moment was six years in the making. The first steps towards this giant leap came in June 2010, when RIL announced the acquisition of a 95 per cent stake in Infotel Broadband, shortly after the latter had secured pan-India broadband spectrum in an auction. While competitors gradually upgraded their 2G and 3G networks, often using different architectures for voice calls, messaging and internet services, Reliance focused on building apan-India VoLTE (Voice over Long Term Evolution) network. This was an all-IP network designed to handle internet and data traffc, with voice calls also treated as data. At the time of its launch, it was reportedly the world’s largest network operating exclusively on 4G LTE technology.

The moment was coming, but nobody expected the extent of disruption that played out. For customers it was a boon (cost per GB of data fell from around ₹228 in FY16 to ₹8 by FY 19), for competitors it was a nightmare. Reliance Communication (Anil Ambani owned telecom player) and Maxis owned Aircel folded up after a failed merger attempt, while Idea and Vodafone India had a successful merger but were driven to the brink of bankruptcy (as AGR liabilities added fuel to fire) before managing to survive. Industry leader – Airtel showed resilience and came out stronger as it had during previous trying moments in the industry. It had also successfully acquired two other players that struggled after the Jio launch – Tata Docomo and Telenor India. From multiple players, the telecom market shrank to four players – although this is not unusual given globally most large economies have only 3-5 players in the sector.

What Jio did was unparalleled - no where in the telecom world has a player entered the business so late and became number one player (by subscriber count) in a country, that too in such a short time (Jio became the top player in July 2019 – less than 3 years after launch). The top 3 mobile players in major countries across the world – USA, Canada, UK, France, China, Brazil, Mexico, etc, have remained entrenched for over decades. The best instances of progress for companies in other countries was like T-Mobile in US overtaking Sprint (prior to its merger with Sprint)) to become the third largest player from a distant fourth position (T-Mobile is now the 2md largest player in the US after merger with Sprint). Nowhere was the applecart upset as in India where only one private company – Bharti Airtel managed to survive in the industry in its original form.

Today the per-capital mobile data consumption in India at 26.7 GB a month is the highest in the world and way ahead of countries like US or China where the number is at around 18-19 GB a month. In FY16 prior to Jio entry, per capita number in India was at less than 0.2GB

A terrific history for Jio and the Indian telecom sector. While shareholders of Reliance Industries (RIL) which owns 66.43 in Jio Platforms have benefited (in the five years after launch of Jio – RIL shares were up over 4x, the recent years underperformance notwithstanding), how prized or pricey is the IPO for new investors? Lets dive in!

Pricing and valuation

The IPO of Jio Platforms (Jio) consists of an entirely fresh issue (proceeds go into the company, not existing shareholders) of 27 crore shares at a price band of ₹1,065 to ₹1,119. At the upper end of the band, the company will raise ₹30,213 crore. Company intends to use the proceeds for repayment of borrowings and general corporate purposes.

At the upper end of the price band, the pre-issue and post issue market capitalization of the company will be, 10 lakh and 10.3 lakh crore respectively, which will make it the fourth largest listed company in India by market capitalization after RIL, HDFC Bank and Bharti Airtel (ranking based on their current market capitalization).

Jio’s pre-issue and post issue PE multiple on trailing twelve month basis will be at around – 32.5 and 33.5 times respectively

On an enterprise value (EV) basis ie. market capitalization plus net debt ( including deferred payment liabilities for spectrum), Jio is valued at around 11.14 lakh crore. Here it needs to be understood that on a pre and post issue basis, the EV of the company does not change as the increase in market cap post issue by ₹30,213 crore is offset by a decrease in net debt from similar inflow of cash into the company. On an EV/EBITDA basis Jio is valued at an EV/EBITDA of around 14.4 times (for why EV and EV/EBITDA matter, refer section on Jio vs peers.

Business

Jio’s primary business is executed through its 100 per cent subsidiary – Reliance Jio Infocom Limited (RJIL) which serves 533.3 million customers in India as of June 30, 2016. The services offered encompass – mobile and fixed broadband services to consumers and enterprises. Other digital services (entertainment suite, cloud services, IoT etc) are offered through other subsidiaries of Jio. In FY26, RJIL accounted for 88 percent of Jio’s revenue and more importantly 95 per cent of its EBITDA and 94 per cent of its PAT. Within these mobile and fixed broadband services business accounted for around 85 per cent of Jio’s revenue and 98 per cent of RJIL’s revenue. While RJIL does not split its revenue segments between mobile and fixed broadband services, how much is driven by mobile services can be gauged from data provided by its close peer – Airtel. Out of Airtel’s total wireless and fixed broadband services revenue in India, its mobile services revenue accounts for around 78 per cent.

Based on this, investors need to approach Jio with one clear perspective – Jio is and will remain for the foreseeable future a company whose fortunes will depend primarily on the evolution of its mobile services business and to lesser extent on the fixed broadband business. While IPO prospectus refers to company’s primary business as that of a technology platform with a business model built on in-built proprietary technology stack (layered software used to build aps that underlie the telecom network and digital services) and potential to monetize its in-built technology stack via selling it to other telecom service providers globally, for now this has to be treated only as work in progress with limited clarity on financial implications for the same.

As of June 30, Jio’s pan-India mobile digital connectivity network reach extended to more than 99 per cent of India’s population. In FY26, around 60 per cent of India’s wireless traffic was on the Jio’s network. As of June 30, Jio had a total customer base of 53.3 crore, out of which around 50.5 crores or 95 per cent is mobile phone subscribers and rest fixed broadband. This represents a wireless service market share of around 40 per cent for Jio in India. Jio had 1.4 time 4G/5G subscribers as compared to Airtel. However Jio ‘s average revenue per user (per month) or ARPU at around ₹215 is lower than that of Airtel’s India mobile ARPU of ₹264. Pls note here that unlike Airtel, Jio provides a blended ARPU for mobile and fixed services combined. So based on reasonable assumptions, it is possible that Jio’s mobile ARPU could be around 5 per cent lower than the reported blended ARPU of ₹215.

Jio vs Peers

With business and prospects on one side, it is also important to gain a perspective on how Jio fares vs its immediate peer – Airtel and also other large telecom players globally. In this context it is important to understand why enterprise value and EV/EBITDA are important metrics to assess for telecom players along with PE multiples. EV refers to the total value of a company. While a company belongs to its equity shareholders, whatever claim they have in the value of a business is only after paying/providing for third party liabilities (bank/bond holders) – primarily the net debt (total debt minus cash/bank balances). In other words, the total value of a company, as perceived by the market, is the sum of its market cap plus net debt. Also what works in the case of EV is that it helps in doing a capital-agnostic analysis of a company. Whether a company is funded only with equity, or a combination of equity and debt, the total value of the business is the same. Sources of funding don’t matter. By measuring EBITDA (which is before interest payments) and EBITDA margins, a pure operational evaluation and comparison of businesses’ performance can be done (ie PAT and earnings will be impacted by capital structure or debt/equity ratio which is not related to business operations). Specifically in telecom sector EV, EBITDA and EV/EBITDA multiples is widely used, even more that PE multiples as it is usually a capex heavy business and involves debt for most companies. Measuring the band of EV/EBITDA multiples globally can help to for a perspective on valuation too. So here is a comparison.

From these charts, it can be inferred that Jio and Airtel are amongst the most expensively valued telecom companies globally. At the same time, they also have superior EBITDA margins, and better growth rates.

Risk vs Reward

Jio offers access to a well-established and well-managed company with a strong track record. With passive infrastructure (telecom towers, long haul fiber network or dumb pipes) hived off its balance sheet to other group companies, Jio has a relatively lean telecom and digital focused business with only active network assets/capex (radio access networks, switches and routers, landing gateway stations etc) on its books. While Airtel too has hived of passive infrastructure business, given its majority ownership of Indus Towers, it forms part of its consolidated operations. Its financials have shown consistent growth and performance with stable/improving margins (see chart below), and it also comes with lean clean balance sheet with very minimal debt for a company in the cash guzzling telecom sector. Its cash flow from operations and FCF have also shown consistent improvement over the years.

With mobile broadband penetration (MBB) in India at 68 per cent (MBB customers/total population) as compared to 132 per cent in China and 124 per cent in the US, there is decent scope for the unit numbers to increase for many years further although at a much lower pace than past years. This growth potential is also supported by a future transition to a 5G and 6G world where more and more connected devices get included in the ecosystem.

Telecom business also comes with strong moats and it is hard to disrupt large entrenched players, especially when the entrenched players have a solid balance sheet and can fight out any disruptive competition.

So much on the side of reward, but there are risks to factor too. At its current pricing Jio is amongst the most expensive telecom services player globally. Given Airtel’s valuation is in the similar range and Airtel’s track record and financials are as solid as that of Jio. Unless Jio is materially cheaper vs Airtel, investors will always have to constantly debate which one is better and probably split their investment choices equally between both companies. To an extent Airtel’s premium valuation was driven by lack of good alternative investment options in the telecom sector or what is termed the scarcity premium. With Jio listing, that gets addressed and there is a possibility of valuation margin compression for both companies over the next year.

Finally while ARPU’s in India are extremely low, that does not guarantee a ticket for aggressive pricing increase. While companies in their interest make a case for increase in prices on the pretext that ARPU is low in India, what is of importance to note here is that Indian telecom players also have the most profitable operations globally (see chart). To an extent this will negate the argument for increase in prices as pushed for by companies. Competitive ecosystem will also keep some checks on this.

Balancing out the factors, based on its current valuation Jio is in a zone where it is hard for investors to ignore nor is it extremely attractive. But given its business and potential, it can be considered as a company that can always be part of a well-diversified portfolio with positions added when attractive opportunities are presented. In this context investors must look at the IPO as an opportunity to ‘get a foot in the door’.

Published on October 17, 2026