Jio IPO: The upcoming listing of Jio Platforms Ltd (JPL) has sparked debate over whether investors could shift some of their exposure away from Bharti Airtel once another major listed telecom company enters the market. However, domestic brokerage Motilal Oswal Financial Services (MOFSL) believes these concerns may be overstated.
According to MOFSL, JPL is expected to have an initial free float of only around 3%, while Bharti Airtel already has broader participation from foreign institutional investors (FIIs) and domestic institutional investors (DIIs). The brokerage therefore does not expect the Jio IPO to cause a major shift in investor allocations away from Bharti.
Jio IPO Valuation and Impact on Bharti Airtel
Reports suggest that Jio Platforms is targeting an IPO valuation of around ₹11 lakh crore, or $114 billion. MOFSL’s own valuation for JPL is around ₹11.2 lakh crore, implying approximately 12 times FY28E EV/EBITDA.
The brokerage said this would represent a premium of around 17% over the implied 10.3 times FY28E EV/EBITDA valuation for Bharti Airtel’s India business, excluding its interests in Indus Towers, Airtel Africa and Hexacom’s minority stake.
Despite this difference, MOFSL does not see a strong case for Bharti Airtel trading at a significant discount to JPL.
Jio currently leads India’s wireless and home broadband markets and has considerable influence over industry pricing. At the same time, MOFSL highlighted Bharti Airtel’s stronger free cash flow generation and higher return on capital employed (RoCE).
The brokerage has assigned broadly similar valuations of around 12 times FY28E EV/EBITDA to JPL and Bharti Airtel’s India business.
MOFSL also valued Bharti’s approximately 51% stake in Indus Towers and around 80% holding in Airtel Africa at nearly ₹1.25 lakh crore, after applying a 25% holding-company discount to their respective current market prices.
In addition, Bharti provides exposure to the data-centre business through its roughly 60% stake in Nxtra and financial services through Airtel Money in India and Africa. These factors, according to MOFSL, support a case for valuation parity.
What Could the Jio Listing Mean for Reliance Industries?
The Jio Platforms listing could also influence the valuation of Reliance Industries (RIL), given that the company owns approximately 66.4% of JPL.
MOFSL said the listing could lead investors to apply a holding-company discount to RIL’s stake in JPL. However, the brokerage noted that the market is already factoring in an 18-36% holding-company discount for this stake under different valuation assumptions.
While investors who bought RIL primarily for its digital business could gain the option of investing directly in JPL after its listing, RIL would continue to provide exposure to other major businesses.
These include India’s largest retailer, the country’s largest integrated energy business and growth opportunities in areas such as new energy, data centres, artificial intelligence and FMCG.
MOFSL said stronger refining and petrochemical cycles, along with a recovery in retail revenue growth and profitability, could remain important medium-term triggers for RIL.
Tariff Hike Could Become a Key Trigger
The brokerage believes the delayed telecom tariff increase has been an important factor behind the recent weak performance of both Bharti Airtel and Reliance Industries.
MOFSL noted that expectations for a tariff hike had earlier centred around December 2025. Bharti Airtel’s stock has fallen around 15% year-to-date, while RIL has declined approximately 23%, compared with a 13% decline in the Nifty 50.
Bharti Airtel has recently discontinued its entry-level ₹299 daily unlimited data plan, which MOFSL believes could support organic average revenue per user (ARPU) growth. Meanwhile, Reliance Jio has brought back its JioPrime membership, a move the brokerage views as a possible indication that a tariff increase could be approaching.
Following the JPL IPO and Vodafone Idea’s expected fundraising, MOFSL now factors in a 15% smartphone tariff hike in December 2026. It expects the move to provide greater visibility for approximately 15% EBITDA CAGR over FY26-29E.
MOFSL Remains Positive on Bharti and RIL
MOFSL has retained its BUY ratings on Bharti Airtel and Reliance Industries, saying the risk-reward profile remains attractive.
The brokerage continues to prefer Bharti Airtel because of its improving free cash flow, deleveraging and premiumisation strategy. It also favours JPL for direct exposure to the high-growth wireless and home broadband businesses and lower capital-allocation risks compared with Bharti.
For RIL, MOFSL sees valuations closer to its bear-case scenario and expects potentially stronger near-term O2C earnings. The brokerage has maintained a Neutral view on Indus, Tata Communications and Vodafone Idea.
Overall, MOFSL believes a JPL listing at around ₹11 lakh crore could become a potential re-rating trigger for Bharti Airtel while also creating an opportunity for value unlocking within Reliance Industries. It expects concerns about investors significantly moving away from Bharti to be overstated and believes a stronger case for telecom tariff hikes following the IPO could support earnings across the sector.
Disclaimer: This article is intended solely for informational purposes and should not be considered investment advice or a recommendation to buy or sell any security. Stock prices and market conditions can change rapidly, and investors should conduct their own research and consult a qualified financial adviser before making investment decisions.