Some foreign-based fund managers have told business magnate Mukesh Ambani’s son Akash Ambani that Jio Platforms Limited’s desired valuation for a planned initial public offering (IPO) was ambitious and may prove to be hard for the market to absorb, Bloomberg has reported, citing sources privy to the discussion.
Akash Ambani, the eldest of the three children of the tycoon, took part in a set of global meetings in business centres like Hong Kong, Singapore, Abu Dhabi, London and New York over the past four weeks. This is reportedly the first time that he is handling a transaction of this magnitude on his own, and the meetings also served as a formal introduction for the 34-year-old to the global financial honchos, the news agency reported. Jio is seeking a valuation of $114 billion (Rs 11 Lakh Crore) in its IPO.
It is a lower figure than earlier expected, sources told Bloomberg, adding that it may fall further amid a volatile macroeconomic environment and market turbulence. The Reliance team said that Jio’s heavy capital expenditure cycle is coming to an end, which would pave the way for its satellite network deployment, those who attended the meeting told the news agency. It said that the company’s decision to build its in-house 5G infrastructure gives the firm more flexibility to commercialise its full spectrum of offerings.
Akash Ambani hinted during these meetings that its technology could be exported to partners, becoming a major revenue driver.
During these meetings, Akash Ambani and his team were questioned by investors, who asked them why Jio merits a premium to Bharti Airtel Ltd, the company’s direct competitor in India. That Jio only charges for its core telecom offering was another point the potential investors raised. They asked the 34-year-old how and when Jio plans to charge for the digital services and platforms it provides at no direct cost, the report said, citing people who attended these meetings.
