Why Reliance Jio's $100B IPO has been postponed
What's the story
Mukesh Ambani-led Reliance Jio has postponed its much-awaited initial public offering (IPO), which was earlier estimated at over $100 billion. The company hopes to boost revenue, grow its subscriber base, and expand its digital services before launching on the stock market. No bankers have been appointed for the offering yet.
Business growth
Jio wants to grow its business before going public
The decision to delay the IPO is part of Reliance Jio's strategy to grow its business and increase its valuation. The company wants to generate more revenue and expand its subscriber base for its telecom business, Reliance Jio Infocomm, before going public. Nearly 80% of Jio Platforms's annual revenue of $17.6 billion comes from this telecom unit, India's largest player in the sector.
Business diversification
Reliance Jio is also expanding into other digital services
Apart from its telecom business, Reliance Jio is also rapidly expanding into other digital services. The company is focused on building apps, connected devices, and AI solutions for enterprises. It has also partnered with NVIDIA to build AI infrastructure. This diversification strategy is part of Ambani's vision for the company and its future growth prospects. Reliance Jio is also gearing up to take on Elon Musk's Starlink internet service in India.
Business recovery
Telecom business faced challenges due to tariff hikes
Reliance Jio's telecom business had faced challenges due to tariff hikes leading to some churn in its subscriber base. However, it has returned to a growth path this year with over 488 million subscribers.