Jio IPO | JP Morgan : Reliance unlikely to announce Retail, Jio IPO in AGM, says JP Morgan


() is unlikely to go for an initial public offering (IPO) for its consumer businesses such as telecom and retail this year, a report by JP Morgan has said.

“RIL’s AGM tends to be announcement-heavy, and expectations run high in the run-up to the AGM (like the last three), and this year they centre on concrete timelines being announced for IPOs of the consumer business,” the brokerage said in a report released on Wednesday. “We do not expect any concrete timelines from this year’s AGM on the consumer businesses IPOs (Jio and Reliance Retail),” it said.

RIL’s annual general meeting (AGM) is expected around July-end or August.

Some recent media reports had talked about possible announcement of demerger and IPO of the telecom and retail businesses of RIL during this year’s AGM.

An email sent to RIL did not elicit any response.

The JP Morgan report said consumer business valuations have held up well and, with likely higher average revenue per user (ARPU) of the Jio telecom business and further ramp-up of retail footprint, it should hold up going forward.

Incidentally, RIL chairman and managing director Mukesh Ambani in his 2019 AGM speech had said about listing these businesses in the next five years.

“We have received strong interest from strategic and financial investors in our consumer businesses, Jio and Reliance Retail,” he had said. “We will induct leading global partners in these businesses in the next few quarters, and move towards listing of both these companies within the next five years.”

Since then, RIL has raised funds from multiple investors for both these businesses.

According to a recent Goldman Sachs report, RIL’s core retail revenue grew 45% in FY22 with the business adding seven stores a day and warehousing area doubled. “We believe RIL’s existing dominance in telecom and offline retail, combined with its partnership and the online traffic dominance of Facebook, can create the fastest growing internet platform in India,” it said. “Within ecommerce, we forecast RIL’s online revenue to grow to $14 billion by FY25 versus $3 billion in FY22. Overall, we expect core retail revenue to grow at 37% CAGR to $38 billion through FY22-25E.”

The report also said Jio’s ARPU is at Rs 168 as the company continued to remove inactive subscribers from its base. With tariff hike largely in the base and smartphone demand slowing, Goldman Sachs said it expects Jio’s June quarter revenue growth to be 2% quarter on quarter.


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