IPO Update: Mukesh Ambani is gearing up for the massive IPOs of Reliance Retail and RJIO

Mukesh Ambani’s enterprises, Reliance Retail Ventures (RRVL) and Reliance Jio Platform, are preparing to conduct two of India’s largest initial public offerings (IPOs) (RJPL). If promoters dilute at least 10% of their shareholding, each company is anticipated to raise 50,000-75,000 crore ($6.5 billion to $10 billion) from the stake sale.

Listing on a global scale

According to insiders, a global listing for both RRVL and RJPL, as well as a listing in India, is not out of the question. Reliance Jio may also be listed on Nasdaq, the world’s largest marketplace for technology businesses, in the United States.

“Once the dust settles over the Russia-Ukraine crisis, both RRVL and RJPL are anticipated to file the prospectus with market regulators.”

According to insiders, the RRVL IPO is expected to be launched around December 2022, followed by RJPL. According to sources, RJPL sold a 33 percent stake to 13 investors in 2020, including Facebook and Google, with a portion of that investment being offered in the IPO by them.

“With a top line of around 1.75 lakh crore for the financial year 2023, RVRL can be valued at around 8 lakh crore.” Due to its strong 40-50 percent EBITDA (earnings before interest, taxes, depreciation, and amortisation) margin, RJPL might be valued at about 7.5 lakh crore.

RJPL should be valued at roughly 12 times EBITDA, according to Deven Choksey, MD of KR Choksey Investment Managers. According to analysts, both companies will be valued higher in the future.

RRVL, which offers groceries, garments, footwear, and consumer electronics, maintains one of India’s largest e-commerce platforms and has about 14,500 outlets across the country.

In December 2021, the company generated revenues of 50,654 crore in a single quarter. Silver Lake, a private equity firm, bought 1.75 percent of the company in September 2020, valuing it at over 4.3 lakh crore (around $57 billion). Analysts claim that RRVL’s income and reach have grown dramatically since then.

Capitalization of the market

Reliance Jio is one of the world’s largest telecom service providers, with almost 420 million subscribers. CLSA, a brokerage firm, has valued RJPL’s mobile business at $ 99 billion, or 11.5 times its EV/EBITDA, as well as the telco’s home broadband business, JioFibre, at $5 billion EV.

RIL, the main promoter of RRVL and RJPL, has a market capitalization of $19.07 lakh crore ($250 billion) as of Thursday’s close.