Jio Platforms listing: Nomura initiates Buy with Rs 1,340 target, eyes upside on tariff hikes, broadband growth

The brokerage expects Jio's listing to encourage the company, which it describes as a price setter, to pursue steady tariff increases that other telecom operators could follow. Nomura estimates Jio Platforms' EBITDA will grow at a compound annual growth rate (CAGR) of 13.5 percent between FY26 and FY29. Nomura identified home broadband as Jio's second growth engine, supported by its extensive network infrastructure and market leadership.

The brokerage also expects a sharp improvement in free cash flow (FCF) as capital expenditure intensity declines, with the bulk of Jio's 5G-related investments largely completed. According to Nomura, Jio's strong network and leading subscriber market share position the company for long-term value creation. At the IPO press conference earlier this month, Managing Director Akash Ambani outlined Jio's strategy to increase revenue realisation per customer by introducing additional digital services rather than relying solely on higher data tariffs.

Ambani said Jio could raise prices but wanted to deliver more services to customers and charge for the added value. He cited the company's voice AI service as an example of revenue opportunities beyond its conventional licensed telecom business. Jio is also exploring international expansion through a capital expenditure-light model, offering its proprietary telecom technology to overseas operators as a managed services partner.

Jio Platforms shares are scheduled to list on the BSE and NSE on Wednesday, following the completion of India's largest IPO. The Rs 30,188-crore public issue was subscribed 22.19 times, with combined demand across the public issue and anchor investor placement exceeding Rs 7.4 lakh crore. The offering attracted nearly 1.39 crore applications. The company finalised its IPO issue price at Rs 1,119 per share, the upper end of the price band, implying an equity valuation of approximately Rs 10.3 lakh crore.

The listing is expected to place Jio Platforms among India’s three largest listed companies by market capitalisation. Jio Platforms has earmarked up to Rs 27,500 crore of its net IPO proceeds to repay or prepay borrowings at its subsidiary, Reliance Jio Infocomm. Ambani said at the IPO press conference that Jio was heading towards becoming net debt-free.