Ambani's Jio set for listing pop, analysts say ahead of record IPO

By Reuters News

By Vivek Kumar M and Bharath Rajeswaran

Oct 15 (Reuters) - Indian billionaire Mukesh Ambani's Jio Platforms IPO is fairly valued, leaving room for a listing-day pop, analysts said, with future gains linked to the company's ability to monetise its large telecom customer base to sell digital and AI services.

The firm, a part of Reliance Industries, is seeking a valuation of $108.3 billion from its $3.2 billion IPO, which will be India's biggest. The share sale will open on October 21 and the shares are expected to start trading on October 28.

Market indicators suggest potential listing gains of 15% to 20%, which would exceed the debut performance of recent large listings, including the National Stock Exchange of India NSEI.BO, Hyundai Motor India HYUN.NS and Tata Capital TATC.NS.

"We expect demand to be resilient across investor categories," said Aishvarya Dadheech, founder and chief investment officer at Fident Asset Management. "The Reliance name carries considerable weight in the market."

Backed by Meta META.O and Google GOOGL.O, Jio is India's largest telecom firm by subscribers with presence in broadband, enterprise, cloud, digital app and data centre businesses.

"The market will want to see how Jio translates its enormous subscriber base, data leadership and digital ambitions into sustained earnings growth," said Arun Kejriwal, founder of Kejriwal Research and Investment Services.

Jio's long-term appeal hinges on building higher-margin businesses beyond mobile, while its scale, network and data give it an edge, Kejriwal said.

The debut would make Jio India's fourth-largest listed company by market value, behind parent Reliance RELI.NS, Bharti Airtel BRTI.NS and HDFC Bank HDBK.NS.

Sustained returns would depend on whether Jio converts its vast user base into higher-quality, higher-margin revenue streams, analysts say.

"Data centres and low-earth-orbit satellite communications could add to earnings over time, though they remain longer-term opportunities," said Dharmesh Kant, head of equity research at Cholamandalam Securities.

The firm, led by Akash Ambani, competes with Sunil Bharti Mittal's Bharti Airtel, which is valued at $118 billion, reflecting its varied investments in Africa, network infrastructure and other businesses.

Nomura, which rates Bharti as its top sectoral pick, said that with a period of easy subscriber gains ending for Indian telecom companies, tariff hikes would become the primary driver of earnings growth.

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($1 = 95.0000 Indian rupees)

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