- What Are Investors Paying for Jio?
- Cheaper Than Airtel on P/E, Costlier on EV/EBITDA?
- What Could Justify a Premium?
- What Could Drive Jio’s Next Phase of Growth: Higher Tariffs?
- Jio’s Spectrum Dues: The Cash Flow Risk Investors Should Watch
- What Should Investors Check Before Applying?
- The Takeaway
Jio Platforms, the telecom and digital services arm of Reliance Industries, is reportedly planning an IPO at ₹1,065-₹1,119 per share, with bidding expected from October 21 to 23, 2026. The price band, dates, and issue size remain subject to confirmation in the final offer document (RHP).
At the upper end, the IPO could raise approximately ₹30,213 crore, valuing Jio at ₹10.3 lakh crore (about $107 billion). The issue comprises 27 crore fresh shares, with no offer for sale (OFS). Up to ₹27,500 crore is earmarked for repaying borrowings of its subsidiary, Reliance Jio Infocomm.
The key question is: does this valuation make sense compared with Airtel, and what future growth does it assume?
What Are Investors Paying for Jio?
Imagine buying a shop. You would want to know how much profit it earns each year and how much you are paying to own it. The same logic applies to Jio's IPO.
Jio Platforms reported FY26 profit after tax of ₹30,049 crore. Dividing its reported IPO valuation of ₹10.3 lakh crore by that profit gives a price-to-earnings (P/E) ratio of approximately 34 times.
In simple words, investors would pay ₹34 for every ₹1 of Jio's annual profit.
But P/E does not account for debt. Analysts therefore also use enterprise value-to-EBITDA (EV/EBITDA). Enterprise value considers the business's equity value and debt, adjusted for cash. EBITDA measures operating earnings before interest, tax, depreciation, and amortisation.
Jio reported FY26 EBITDA of ₹76,255 crore and an EBITDA margin of 51.9%. In other words, it generated approximately ₹52 in EBITDA for every ₹100 of revenue. That demonstrates strong operating profitability, but EBITDA is not the same as cash available to shareholders.
Cheaper Than Airtel on P/E, Costlier on EV/EBITDA?
Bharti Airtel is a useful benchmark for evaluating Jio's IPO valuation. But the comparison gives different results depending on the measure used.
On the price-to-earnings (P/E) ratio, Jio looks cheaper. At an estimated 34 times FY26 earnings, its valuation is below Airtel's P/E of 35.4 times as of October 12, 2026. This suggests investors are paying less for each rupee of Jio's reported profit, although the comparison depends on using consistent earnings periods and valuation dates.
The picture changes on EV/EBITDA. Motilal Oswal estimated Jio at approximately 12 times its projected FY28 EBITDA, compared with 10.3 times for Airtel's India business. Airtel's EV/EBITDA multiple was 9.86 times as of October 12, 2026. These numbers use different valuation dates and, in some cases, different financial periods, so they should not be treated as a perfectly like-for-like comparison.
Why do the measures tell different stories? Debt is one reason. Airtel's reported net debt-to-EBITDA ratio was around 1.4 times, compared with Jio's 0.36 times. Higher interest costs can reduce net profit and push up the P/E. EV/EBITDA, meanwhile, includes debt in the business valuation but excludes interest costs from operating earnings.
The takeaway: Jio appears slightly cheaper than Airtel on P/E but more expensive on EV/EBITDA when compared with the cited brokerage estimates. Neither measure alone establishes whether Jio's IPO is attractively priced.
What Could Justify a Premium?
Two factors could support Jio's valuation: stronger cash generation and future growth.
1. Cash generation has improved
Jio's EBITDA less cash capital expenditure rose from ₹1,449 crore in FY24 to ₹42,071 crore in FY26. Over the same period, its net debt-to-EBITDA ratio fell from 0.88 times to 0.36 times.
This suggests Jio is generating substantially more operating earnings after capital expenditure while carrying less net debt relative to EBITDA.
However, EBITDA less capex is not free cash flow. Interest, taxes, working capital, and other payments still need to be accounted for.
2. Earnings could continue growing
Motilal Oswal expects Jio's EBITDA to grow approximately 15.2% annually between FY26 and FY29, compared with 14.6% for Airtel. These are forecasts, not guarantees, and the difference is relatively small.
Meanwhile, Jio's FY26 average revenue per user (ARPU) was ₹214 per month, below Airtel India's mobile ARPU of ₹257.2. Jio's EBITDA margin of 51.9% was also below Airtel's 57.5%.
These differences matter. Jio's valuation premium is not explained by higher current ARPU or a higher EBITDA margin. Investors are being asked to consider its future growth potential.
What Could Drive Jio’s Next Phase of Growth: Higher Tariffs?
ARPU measures the average monthly revenue generated per customer. Higher tariffs could increase ARPU without requiring a proportionate increase in network infrastructure.
For illustration, a 10% increase would lift Jio's ARPU from ₹214 to approximately ₹235 per month. If customer numbers and usage remained broadly stable, that could meaningfully increase revenue.
Some incremental revenue could flow into EBITDA because many network costs do not rise directly with tariffs. But the outcome would depend on customer retention, competitive responses, and the actual timing and size of any price increases.
No tariff increase should be treated as certain until announced.
Jio’s Spectrum Dues: The Cash Flow Risk Investors Should Watch
Jio's reported net debt of ₹27,579 crore does not include approximately ₹1,04,514 crore of deferred spectrum-related payments cited in the draft disclosures.
Spectrum is the airwaves telecom companies need to provide mobile services. Payments can extend over many years, making their schedule important when assessing future cash requirements.
The proposed ₹27,500 crore debt repayment targets borrowings, not the entire spectrum liability. Consequently, lower reported net debt does not mean Jio has no substantial future payment obligations.
If tariffs rise more slowly than expected, competition limits pricing power, or spectrum payments absorb more cash, the financial benefits of Jio's improved cash generation could be smaller than investors anticipate.
What Should Investors Check Before Applying?
- The RHP: Confirm the price band, issue terms, and use of proceeds.
- Valuation comparisons: Check peer multiples using consistent dates and earnings periods.
- Spectrum obligations: Understand the payment schedule and its impact on future cash flows.
- Operating performance: Track ARPU, subscriber trends, margins, and capital expenditure.
The Takeaway
At ₹1,119, Jio's IPO is not just a bet on a large, profitable telecom business. It is also a bet on future growth, stronger customer monetisation and continued cash generation.
The business has demonstrated financial strength, but its valuation must be judged against the growth it can realistically deliver and the obligations it still needs to meet.
The central question for investors is whether Jio can turn its scale into enough additional earnings and cash flow to justify the price they are being asked to pay.
For more opportunities to explore, check the latest open IPOs, upcoming IPOs, and recently closed IPOs on INDmoney.