Reliance Jio IPO: Can the techco pivot drive the USD 170 B bid?

The impending Initial Public Offering (IPO) of Reliance Jio Infocomm (Jio), tentatively scheduled for 2026, is not merely a capital markets event; it represents a structural inflection point in the history of corporate India.

With investment bankers and analysts proposing a valuation range between USD 130 billion and USD 170 billion, the listing is poised to be the largest in the country’s history, potentially eclipsing the market capitalisation of established giants such as Bharti Airtel and challenging global telecommunications benchmarks.

However, viewing this solely as a telecom listing provides a limited perspective. The narrative Reliance Industries Limited (RIL) is constructing—and asking the market to underwrite—is a transition from a ‘Telco’ (utility connectivity provider) to a ‘Techco’ (digital ecosystem platform).

This pivot is anchored in what Morgan Stanley describes as ‘Monetisation 4.0’. The phase is characterised by the simultaneous maturation of deep-tech investments, large-scale AI infrastructure deployments, media consolidation through the Disney (Star/Hotstar) merger, and a decisive shift in capital allocation—from aggressive capex to sustained free cash flow (FCF) generation.

For the first time in three decades, all three of RIL’s growth engines—Energy, Retail, and Telecom—are projected to be FCF positive simultaneously by 2026.

The Indian IPO Environment: Lessons from 2024-2025

While 2025 surpassed 2024 with record fundraising of over USD 20 billion, liquidity during the period was highly selective. The Indian bourse has evolved from speculative exuberance to more discerning capital allocation. Three distinct archetypes of listings emerged, offering important lessons for Jio.

# 1 Hyundai Motor India (The Aggressive Incumbent)
As the largest IPO of its time at USD 3.3 billion, Hyundai Motor India was expected to be a bellwether. Instead, it was listed at a discount. The structural flaw was a pure Offer for Sale (OFS) combined with ‘perfection pricing’, which left no upside for investors.

The market delivered a clear signal—even for dominant incumbents, it is unwilling to pay a valuation that captures all future gains on day one.

Implication for Jio: Reliance must avoid the ‘Hyundai trap’. A USD 170 billion valuation is ambitious; if priced to perfection, it risks a muted response irrespective of brand strength.

#2 LG Electronics (The Value Multinational)
In stark contrast to Hyundai, the listings of LG Electronics India and Tata Capital in 2025 demonstrated the market’s appetite for reasonably valued, high-governance assets. LG Electronics India saw a 50% surge on debut, driven by scarcity premium and reasonable pricing.

The key driver was scarcity premium—given the limited presence of listed consumer durable MNCs of this scale—combined with a valuation that appeared to be optically cheaper than that of contract manufacturers such as Dixon Technologies or Voltas.

Implication for Jio: To mirror LG’s success, Jio must emphasise its scarcity value while ensuring pricing leaves visible upside for public market investors. Articulating its Techco identity clearly will be central to this positioning.

#3 Tata Capital (The Conglomerate Compounder)
The Tata Group’s financial services arm’s Rs 15,511 crore IPO saw robust subscription (1.95x overall) and a stable listing. This underscored the deep trust institutional investors place in conglomerate-backed NBFCs with clean loan books and clear ownership structures.

Implications for Jio: Jio can draw on Reliance's conglomerate halo, but must also recognise the inevitable holding-company discount. Transparency, governance clarity, and capital discipline will be critical in sustaining investor confidence post-listing.

Structural Transformation: From Telco to Techco

Jio’s USD 170 billion valuation ambition sits uneasily with traditional telecom benchmarks. Global telcos typically trade at 6–8x EV/EBITDA. To justify a multiple closer to 15–18x, Jio is deliberately decoupling its identity from that of a regulated utility and repositioning itself alongside global technology platforms.

If valued strictly as a telco, Jio might command USD 80-90 billion. It is the addition of the ‘AI Premium’ and the ‘Media Monopoly Premium’ that bridges the gap to the USD 170 billion target. Jefferies has already rolled forward its valuation to FY27, estimating an Enterprise Value (EV) of USD 180 billion based on this sum-of-the-parts ‘techco’ logic.   

Global private markets in 2025 provide a useful reference point. The AI supercycle has driven benchmark valuations to unprecedented levels, with OpenAI reportedly valued at USD 500 billion and SpaceX, anchored by Starlink, approaching USD 800 billion. If valued strictly as a telco. Jio is on that path toward a high valuation (see the table Global Private Market Valuation Benchmarks Vs Reliance Jio).

Jio’s narrative synthesises three interlinked pillars. The first is an infrastructure moat (like SpaceX), built around what is positioned as the world’s largest private data network spanning 5G and fibre.

The second is an intelligence layer (like OpenAI), centred on sovereign AI models and AI-as-a-service capabilities developed in partnership with Nvidia. The third is control over media and attention (like ByteDance), reinforced by unrivalled content dominance through the JioStar platform. Together, these elements underpin Jio’s attempt to be valued not as a telco, but as a converged digital platform.

The ‘JioBrain’ and the Nvidia Alliance

Reliance has correctly identified that in a post-5G world, connectivity is a commodity, but intelligence is value-added. The partnership with Nvidia is the cornerstone of this strategy.

On the infrastructure front, Jio is constructing a gigawatt-scale, AI-ready data centre in Jamnagar designed to house Nvidia’s latest GH200 Grace Hopper Superchips.

The strategic thesis is ‘sovereign AI’—unlike global LLMs trained primarily on English datasets, Jio is building foundational models on India’s diverse linguistic corpus. This unlocks ‘AI-as-a-Service’ for Indian use cases, such as vernacular voice banking, multilingual customer service, or agricultural advisory, where US-centric models remain structurally constrained.

Internally, ‘JioBrain’ is being deployed to automate network planning and customer support, decoupling revenue growth from headcount growth and strengthening operating leverage.

The Connectivity Moat: 5G and AirFiber

While AI represents the future, connectivity remains the cash engine. Jio has consolidated leadership with over 506 million subscribers as of late 2025. A core differentiator is its capital-intensive Standalone 5G (SA) architecture.

In contrast to Airtel’s Non-Standalone (NSA) path, Jio’s SA network enables network slicing—dedicated virtual networks for enterprise customers—creating a clearer path to monetisation beyond consumer ARPU.

The second pillar is AirFiber. Fixed Wireless Access (FWA) has effectively solved the last-mile bottleneck, allowing Jio to capture an estimated 75–80% share of the FWA market and add significant wireline subscribers through late 2025. This expands the ‘home broadband’ funnel, typically associated with higher ARPU and lower churn than mobile prepaid.

Jio’s enterprise push further deepens this moat. Through its Microsoft Azure partnership, JioBusiness bundles cloud and connectivity, reducing digitisation barriers for MSMEs. This segment is expected to be a primary driver of the 18% revenue CAGR forecast through FY28.

The Media Monopoly Game

The merger of Viacom18 and Disney’s India assets into JioStar creates an unrivalled media hegemon. By combining Star India’s linear distribution strength with JioCinema/Hotstar’s digital dominance, the entity controls an estimated 35–40% of viewership and nearly 70% of premium advertising inventory.

More importantly, with rights to the IPL and ICC tournaments, JioStar has cornered cricket—the single most valuable asset in Indian media—granting extraordinary pricing power with advertisers.

For the IPO narrative, JioStar serves as both a retention engine (reducing churn) and an indirect tariff lever, by shifting premium content behind paywalls and normalising higher consumer spending.

Valuation Analysis: Airtel Vs. Jio

The primary pushback against Jio’s USD 170 billion valuation is the comparison with Bharti Airtel. The arch-rival Airtel typically trades at a premium due to its ‘quality’ subscriber base and higher ARPU (Rs 256 versus Jio’s Rs 211) [see Comparative Financial Metrics: Jio vs. Airtel (Estimated FY25/26)].

Investment bankers, however, argue that Jio deserves a premium based on its future trajectory. First, Jio’s capex cycle is peaking, with its 5G rollout largely complete, whereas Airtel still faces elevated spending to transition from NSA to SA. This implies Jio will generate stronger free cash flow in FY26–28.

Second, a structural tariff hike is widely anticipated in late 2025 or early 2026. While Jio has historically played the price warrior, the IPO creates an incentive to lead tariff hikes, improve the P&L profile, and reframe the market’s valuation lens.

Regulatory Tailwinds and Strategic Outlook

The regulatory landscape offers bespoke advantages. Recognising the liquidity risks of a mega-IPO, SEBI has amended its rules for issuers with a market capitalisation above Rs 5 lakh crore (USD 60 B+).

The minimum public offer (MPO) requirement has been reduced from 10% to 2.5%, while issuers have been granted up to 10 years to reach the 25% minimum public shareholding threshold.

This allows Reliance to list Jio with a float of roughly USD 4.3 billion, rather than a market-disrupting USD 17 billion. The reduced float improves price discovery and reinforces a ‘scarcity premium’, supporting stronger demand dynamics.

The 2026 IPO of Reliance Jio is poised to be the coronation of India’s premier digital infrastructure asset. The USD 170 billion valuation is based on a perfect execution of the ‘techco’ pivot and successful media integration. To succeed, Jio must convince investors it is not a utility piping data, but a platform processing intelligence and commanding attention.

With SEBI’s favourable framework and a supportive global appetite for tech assets, the stage is set. However, sustained ARPU growth amidst a competitive duopoly remains the key risk. Ultimately, the IPO will test—and potentially validate—Reliance’s strategy of building a dominant digital ecosystem, cementing Jio’s leadership in India’s next-gen landscape.

The author is a former Partner at KPMG in India.
(Views are personal.)