By Aditya Kalra and Kane Wu

Reliance Industries: Upcoming IPO Plans

NEW DELHI/HONG KONG (Reuters) – Indian billionaire Mukesh Ambani aims for a 2025 IPO for his telecom business Jio, which analysts value over $100 billion. The retail unit's IPO is planned for a later date, as per two anonymous sources familiar with the matter.

Ambani had previously mentioned in 2019 that Reliance Jio and Reliance Retail would aim for a listing within five years. Recently, Ambani, known as Asia's richest man, raised $25 billion for his digital, telecom, and retail ventures, further solidifying the valuation above $100 billion for both.

According to the sources, Reliance Jio is set for its IPO planning, given it has established a robust business model, being India's leading telecom player with 479 million subscribers. In contrast, the retail business IPO is postponed until after 2025 to fix operational issues.

Reliance Industries did not respond to requests for comments on these developments.

With the possibility of facing Elon Musk's Starlink in India, Jio, supported by Google and Meta, is collaborating with Nvidia for AI infrastructure development. Although bankers haven't been appointed for the IPO yet, Jefferies recently estimated Jio's valuation at $112 billion.

Reliance aims for the 2025 Jio IPO to become India's largest, surpassing Hyundai India's record of $3.3 billion IPO this year. However, the sources indicated that the timelines for the IPOs could change.

Indian markets have recently reached record heights, with 270 companies raising $12.58 billion from IPOs this year, exceeding the total raised in 2023 of $7.42 billion.

Retail Unit Operational Improvements Needed

Reliance plans to avoid allowing both Jio and the retail unit to list simultaneously. The first source indicated there are significant operational issues requiring resolution for the retail unit before pursuing an IPO.

The retail unit has expanded rapidly, including entering various formats such as e-commerce, but has recorded losses in some brick-and-mortar stores, leading to suboptimal earnings. This is particularly evident as Reliance Retail operates the largest grocery store network in India with 3,000 supermarkets.

The segment has recently experienced its first quarterly sales decline in three years, with a reported 1.1% drop in sales from July to September due to competition from quick commerce startups.

Last year, Bernstein valued the retail business at $112 billion, which includes the toy retailer Hamleys and partnerships with brands such as Jimmy Choo, Marks & Spencer, and Pret A Manger. Notably, Jio Platforms, encompassing telecom and digital operations, is 33% owned by foreign investors after raising $17.84 billion in recent years. Similarly, Reliance Retail sold approximately 12% stake to foreign investors, raising $7.44 billion.