Jio Platforms Ltd

Jio Platforms is Reliance’s digital arm and India’s largest telecom operator, with 533 mn customers. We see Jio as the leader of a near duopoly that would be very hard for a new entrant to challenge, with 49.8% of India’s mobile broadband connections. Against Airtel, it leads on customers, data traffic, 5G users and home broadband, while Airtel still earns more per user. Jio still has room to grow, from rural users and home broadband to higher ARPU (average revenue per user) through tariff increases and bundled services. With its heaviest spending behind it, free cash flow after leases, interest and spectrum payments has turned positive at INR 20,331 cr, and the IPO proceeds will cut debt further. At 33.6x TTM (trailing twelve months) P/E against 40.9x for Airtel India, it is priced in line with its rival. Meta, Google and 11 global investors, who together put USD 20.1 bn into Jio in 2020, are not selling any shares in the IPO. We are positive on the company and will track it closely after listing, and investors looking for listing gains may consider subscribing.