Mukesh Ambani is gearing up for the launch of two of India’s biggest IPOs by his companies, Reliance Retail Ventures (RRVL) and Reliance Jio Platform (RJPL). Each company is likely to raise ₹50,000-75,000 crore ($6.5 billion to $10 billion) in the stake sale assuming that promoters dilute at least 10 per cent of their holdings.
Sources told BusinessLine that Ambani is likely to make an announcement with regard to the two IPOs during the annual general meeting (AGM) of Reliance Industries (RIL) this year.
According to sources, a global listing for both RRVL and RJPL simultaneously along with a listing in India cannot be ruled out. Reliance Jio may also be listed in the US on the Nasdaq platform, which is the world’s largest marketplace for tech companies.
“Both RRVL and RJPL are expected to file the prospectus with market regulators once the dust over the Russia-Ukraine conflict settles.
The expectation is to launch the RRVL IPO by around December 2022, followed by RJPL, sources said. In 2020, RJPL sold a 33 per cent stake to 13 investors, including Facebook and Google, a part of which could be offered in the IPO by them,“ sources say.
“RRVL can be valued at around ₹8 lakh crore considering a top line of around ₹1.75-lakh crore for the financial year 2023. RJPL could be valued at around ₹7.5 lakh crore due to its high 40-50 per cent EBITDA (earnings before interest, taxes, depreciation, and amortisation) margin.
It is fair to give around 12 times EBITDA valuation to RJPL,” said Deven Choksey, MD, KR Choksey Investment Managers. Analysts say that both companies will be further valued at forward earnings of FY25, closer to their IPO.
RRVL which sells groceries, apparel, footwear, and consumer electronics, has nearly 14,500 stores across India and operates one of the largest e-commerce platforms in the country.
The company had revenues of ₹50,654 crore in a single quarter in December 2021. In September 2020, private equity major Silver Lake purchased 1.75 per cent stake in the company, valuing it at around 4.3 lakh crore (approx. $57 billion). RRVL’s revenues and reach have expanded sharply since then, analysts said.
Reliance Jio, with close to 420 million subscribers, is one of the largest telecom service providers in the world. Broking firm CLSA has valued RJPL’s mobile business at $ 99 billion giving it 11.5 times the EV (enterprise value)/EBITDA, along with the telco’s home broadband business, JioFibre valued at $5 billion EV.
As of Thursday’s closing, the market capitalisation of RIL, the largest promoter of RRVL and RJPL, stood at ₹19.07 lakh crore ($250 billion).