Reliance’s Jio Platforms has become a household name in India. The company’s affordable data plans and fast internet speeds have disrupted the Indian telecom market, making it the largest telecom operator in the country. In terms of subscribers, Reliance Jio’s share of the market is estimated to be over 35%. The telecom giant that pioneered 4G in India is now rapidly expanding its 5G network. By the end of December 2022, the company had expanded its 5G footprint to 2,300 towns and cities.
The company which was launched just seven years back, is now bringing in revenues worth thousands of crore to the Reliance Group. In the March quarter of 2023, the company booked a profit of ₹4,716 crore. Now, with this meteoric rise, the market leader position, and the Reliance brand attached, the company looks set to scale new heights. So, in this article, we take a closer look at Jio, the company, and how you as an investor can look to invest in its probable growth story.
Reliance Jio Company History
Reliance Jio is a subsidiary of Reliance Industries Limited (RIL), one of the largest conglomerates in India. RIL was founded by Dhirubhai Ambani in 1958 and has since then grown into a multinational company with interests in a wide range of industries including petrochemicals, refining, oil, and gas exploration, retail, and telecommunications.
Jio was launched in 2016 and quickly disrupted the Indian telecom market with its affordable data plans and fast internet speeds. Today, Jio is the largest telecom operator in India with over 430 million subscribers.
Reliance Jio Fundamentals
The company finances have been on an uptick since the last four quarters. The company’s revenue for the March quarter of 2023 stood at ₹23,394 crore, up 11% year-over-year. EBITDA for the period stood at ₹12,210 crore and net profits stood at ₹4,716 crore, up 13% YoY.
As the table depicts the company’s profits have been increasing steadily every quarter and EBITDA margins remain healthy at over 50%.
How To Buy Jio Shares
Jio is not a listed company, so it will not be possible for you to invest in Reliance Jio’s shares or check Reliance Jio’s share price. It is, however, possible to invest in Reliance Industries shares, which is Jio’s parent company. RIL is listed on the Indian stock exchanges and is one of the most valuable companies in India with a market capitalisation of over ₹16 lakh crore.
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However one should note that Reliance is a large conglomerate and it has a wide variety of holdings ranging from oil to telecom to FMCG. Therefore, Jio only constitutes a portion of the company's business interests. So it is difficult to estimate the share price of Reliance Jio based on RIL share price.
Factors Affecting Jio’s Share Price
Although Jio is not a listed company, its parent company RIL’s share price can be affected by factors that impact Jio’s performance. Some of the factors that can affect Jio’s performance and RIL’s share price include:
Competition: Jio faces intense competition from other telecom operators in India. If Jio loses market share to its competitors, it could impact RIL’s revenue and profitability.
Regulatory changes: The Indian telecom industry is heavily regulated, and changes in regulations can impact the industry’s performance.
Digital services: Jio has been investing heavily in digital services such as e-commerce, online payments, and content streaming. If these services perform well, it could provide a boost to RIL’s revenue and profitability.
Indian economy: RIL’s performance is closely tied to the Indian economy, which can be affected by factors such as inflation, interest rates, and geopolitical tensions.
Alternative Ideas: Jio’s Competitors
If you’re interested in investing in the Indian telecom market, there are alternative options to consider. Two of Jio’s main competitors are Bharti Airtel and Vodafone Idea.
Airtel is the second-largest telecom operator in India with over 330 million subscribers. The company is listed on the Indian stock exchanges and has a market capitalisation of over ₹4 lakh crore. The company is the biggest competitor of Reliance and was largely considered the market leader before Reliance Jio’s entry.
Vodafone Idea, on the other hand, is a merger between Vodafone India and Idea Cellular. The company has a subscriber base of around 220 million. Vodafone Idea has been struggling with debt and has faced challenges in the competitive Indian telecom market. The inability of the company to keep up with the competition has many fearing that the massive telecom sector may turn into a duopoly.
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Editor’s Note: Artificial intelligence was used as a secondary aid in writing of this story.
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