India’s largest telco Reliance Jio is likely to hit up to 500 million subscribers by the financial year ending 2026, Bernstein Research said in a note.
What Happened? The research firm estimates that Jio will soon have a lion’s share of the Indian telecom market and might even be headed for a public listing in the near future as some private equity investors might look for an exit.
Bernstein expects Jio's market share to grow to 47% in the next four years from 44% currently. Meanwhile, it estimates Bharti Airtel's share will reach 48% in the same period from 44% currently. However, the report suggest Jio will capture 48% of the subscriber share in the country while Airtel will have 35% by FY26.
With Vodafone Idea‘s business on shaky ground, Jio and Airtel could further consolidate their position in the industry, Bernstein's lead telecom analyst Rahul Malhotra said in the note.
The note also said that since a near-time tariff hike is likely to get pushed out, Bernstein expects Jio's average revenue per user (ARPU) to hit ₹225 by FY26, driven by 5G monetization, from the ₹178.8 it stood at in the March quarter.
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At the same time, the research note suggested the Mukesh Ambani-backed firm could consider an IPO amid a favourable pricing environment as international investors, with a combined stake of 33%, could look to exit the telco after being invested in it for nearly four years
Analyst’s Call: Given strong prospects for growth as well as an IPO for Jio, Bernstein retained an "outperform" rating on RIL with a target price of ₹3,210, which implies a 30% upside potential to its current value.
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