Will Reliance Industries Ltd Stock Get A Holding Company Discount After Jio's Market Debut?

Jio IPO: The Reliance Industries Ltd's 49th Annual General Meeting (AGM) met market observers expectations linked to Mukesh Ambani's annual speech as the RIL Chairman finally announced thatJio Platforms had filed its DRHP with market regulator Securities Exchange Board of India (SEBI). 

The company's revenue stood at Rs 1,46,885 crore, growing 14.6% YoY, while the EBITDA grew by 18.8% to hit Rs 76,255 crores. The EBITDA margin  improved by 190 basis points to 51.9% in FY26.

Notably, the company's profit after tax for the first time crossed Rs 30,000 crore, registering a growth of 15.1% year-on-year.

In terms of operational scale, Jio's user base has crossed 524 million customers mark, meanwhile, its 5G subscriber base has surpassed 268 million mark.

Coming to its broadband services, Jio AirFiber has become the world's largest fixed wireless broadband operator last year. The total data traffic on Jio's network in FY26 stood at 241 exabytes, recording a 30.8% YoY growth.

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Currently, India is the lowest-cost telecom market globally and the second largest in terms of subscribers, after China. Prime Minister Narendra Modi’s vision of Digital India was made possible to a large extent through Reliance Jio, along with contributions from Bharti Airtel and Vodafone Idea.

The proposed $4 billion IPO could become India’s largest ever, surpassing even the NSE IPO announced a few days earlier. It will comprise a fresh issue of 27 crore equity shares, with the proceeds being utilised to either partly or fully repay high-cost debt on the company’s books.

Pre-IPO, RIL holds a 66.43 per cent stake in Jio, while the balance is held by Meta Platforms, Google and other institutional investors. This raises a pertinent query - RIL suffer a holding company discount following Jio’s listing?

The market impact is likely to be seen via capital allocation. Major insurance companies, pension funds, domestic mutual funds, and foreign institutional investors are expected to participate in the Jio public offering. To prepare for that allocation, some institutions may reduce positions in existing holdings and build cash reserves. Such portfolio adjustments are common ahead of major IPOs.