Jio Platforms IPO with overseas listing in the offing

An overseas listing may be on the cards for Jio Platforms, once Reliance Industries Limited sells 20-25 percent in Jio Platforms and the government issues direct international listing guidelines. Nasdaq in the US will be the most- preferred destination. The company is preparing Jio Platforms Ltd. for an initial public offering outside of India, Morgan Stanley as the lead banker to manage the overseas listing, and Bank of America Merrill Lynch and Citibank, the bankers for the IPO.

This is largely possible, with the finance minister’s announcement on May 17 that Indian public companies will now be permitted to directly list their shares abroad, without a simultaneous listing in the Indian market. This would enable them access a larger pool of capital.

The enterprise value of Jio Platforms, a six-month old company, is now valued at Rs 4.91 trillion (USD 73 billion), making it comparable with global platforms such as Alphabet, Tencent, and Alibaba, that are largely debt-free and have large digital ecosystems.

The major strength, Jio Platforms has its multiple revenue streams from the same user base. It is a subscription driven model and has a lot of consumer data. It uses latest technology and cloud computing for delivery which decouples revenue from the number of users or subscribers that one has. Which means that the more times the same customer base is used for multiple revenue mechanism, the higher the valuation is. And for an investor this is very attractive as the growth in user base is also good quarter-on-quarter. When you are able to add that kind of subscriber base and do multiple times monetisation, then of course it makes it very interesting as a company.

Jio Platforms, the digital subsidiary of Reliance Industries Ltd, houses the group’s digital business assets including Reliance Jio Infocomm Ltd.

—CT Bureau