Jio Platforms debut values company at $137.1 billion

Mukesh Ambani now holds controlling stakes in the two most valuable companies in India following the initial public offering of Jio Platforms. The telecom and digital services firm began trading on Wednesday and saw its shares rise another 3.3% at the open on Thursday. This performance occurred a day after the stock listed at a premium of more than 25% to its IPO price.

Jio Platforms, which lists Meta and Google as backers, reached a market capitalization of 13.05 trillion rupees. In dollar terms, that valuation stands at $137.1 billion. Reliance Industries, the flagship company of the Ambani group and currently India's most valued firm, retains more than 64% of Jio Platforms after the offering. This structure places both entities under the control of Ambani and his family.

Before the listing, Ambani was visibly moved as his three children spoke to the market. They outlined the history of building Jio and pledged to generate value for investors over the next 50 years. Akash Ambani, the 35-year-old eldest son and managing director of Jio Platforms, addressed investors on Wednesday. He stated that the company intends to democratize technologies that transform Indian lives over the next decade. He identified artificial intelligence, cloud services, connected devices, and satellite connectivity as key growth areas.

Analysts point to specific financial metrics to explain the stock's strength. Anurag Singh, founder of U.S.-based Ansid Capital, noted that Jio cleared nearly 300 billion rupees of debt with only 3% share dilution. He compared Jio's market value to American telecom giants AT&T and Verizon. According to LSEG data, AT&T has a market capitalization of $139 billion and Verizon holds $179 billion. Singh argued that Jio now sits on par with these established global firms.

Vaqarjaved Khan, a senior analyst at Angel One, highlighted the company's operational scale. He cited a customer base exceeding 500 million, operating margins of 52%, and net leverage of 0.36 times. However, Khan warned that the current price-to-earnings ratio of 34 times prices in much of the company's quality. He suggested that future returns will rely on gains in average revenue per user and the expansion of AI services.

The listing has also altered the hierarchy of Indian conglomerates. A Bloomberg report indicates that the Reliance Group's market value has reached 30 trillion rupees. This total now exceeds the 25 trillion rupee valuation of the Tata Group. The shift makes the Ambani family business the largest conglomerate in the country by market value.

Despite the financial success, Jio faces external scrutiny regarding its satellite plans. Elon Musk criticized the Ambanis earlier this month. He blamed the family for delays in launching Starlink services in India. The company's strategy to enter satellite communications remains a focal point of this rivalry.