IPO or Spin-Off? Exploring the Possibilities in 2025.

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IPO or Spin-Off? Exploring the Possibilities in 2025.

Potential IPO or Spin-Off of Jio Platform

a public listing in 2025 or a spin-off.

In the first scenario, Jio could go public through an IPO, with Sebi regulations requiring RIL to list only 10% of Jio. The entire IPO would likely be an Offer for Sale (OFS) by minority investors.

However, Jefferies notes concerns about mobilizing large retail investors for an IPO. Additionally, the lower controlling stake in Jio after a spin-off could be addressed by RIL buying back a portion of the shares offered by private equity funds.

In the second scenario, RIL could spin off Jio, similar to its previous move with Jio Financial Services (JFS). This option might be more attractive due to investor preference for spin-offs in India, where holding company discounts are typically lower than in other countries.

Jefferies believes that the strong performance of RIL and JFS stock prices since the spin-off, along with the less than majority stake of the owners in JFS, may favor the spin-off route for Jio.

Ultimately, the decision of whether to pursue an IPO or spin-off for Jio Platform will depend on various factors, including market conditions and investor sentiment.