Bharti Airtel shares rose 2% after Mukesh Ambani said Reliance Jio will file its DRHP today. The IPO could reshape telecom valuations and competitive dynamics.
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Bharti Airtel shares rose 2% in early trade after Mukesh Ambani said Reliance Jio will file its draft red herring prospectus later today. The move pushed the stock to its highest level in two weeks.
Traders said the rally reflected expectations that the Jio IPO would establish a valuation benchmark for India's telecom sector, where Bharti Airtel and Jio have jostled for market share over the past five years. A public listing gives investors a direct way to price Jio's subscriber base, average revenue per user, and capital expenditure needs, several analysts said.
The filing, expected before the Securities and Exchange Board of India this week, would mark the first time Jio's financials are disclosed to the broader market. The company has been privately held since its 2016 launch, and its revenue and profit figures have only been visible through Reliance Industries' consolidated statements.
Bharti Airtel's 2% gain outpaced the benchmark Nifty 50, which opened flat. The stock's move suggests investors see the IPO as a catalyst for sector-wide revaluation rather than a threat, a Mumbai-based trader said. Jio's listing could spur consolidation and capital-raising across the industry, the trader added.
Earlier this month, the Bombay High Court quashed an ₹8,414 crore demand against Bharti Airtel related to license fee disputes. The court ruling removed a major overhang on the stock, though the stock had barely reacted at the time.
Investors will be watching the DRHP for details on Jio's proposed valuation, use of proceeds, and the percentage of equity being offered. Market participants expect a valuation between ₹5 lakh crore and ₹6.5 lakh crore based on recent private transactions, though no official range has been set.
The IPO timeline could stretch into late 2025 or early 2026, depending on regulatory approvals and market conditions. Bharti Airtel's next catalyst is its June quarter earnings, due in August, where analysts expect subscriber additions to slow after a tariff hike in late 2024.
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