Can Jio’s massive scale convert into superior returns?

Jio Platforms' market-leading scale and faster revenue growth than its listed telecom rivals underpin its ₹30,213 crore initial public offering (IPO). But as investors weigh the country's biggest-ever share sale, the key question is whether the company can convert its vast subscriber base into higher customer spending and better returns on capital.

Jio had 533.3 million customers as of June 2026, with a 50% share of wireless broadband and 42.6% of fixed broadband, and it has the largest 5G customer base outside China, according to Emkay Global Financial Services. The company carries about 60% of India’s wireless data traffic. Consolidated revenue grew at a compound annual rate of 15.8% between FY24 and FY26, against 13.3% for Bharti Airtel and 2.6% for Vodafone Idea.

Emkay values Jio at 15.6 times FY26 enterprise value to Ebitda and recommends subscribing to the IPO. Centrum values Jio's equity at ₹11.5 trillion, using an enterprise value-to-Ebitda multiple of 12 times estimated FY28 Ebitda. In comparison, Bharti Airtel, which has a business in Africa and counts Indus Towers as a unit, trades at 8.6 times its estimated FY28 Ebitda, according to Bloomberg data.

Jio Platforms' market-leading subscriber base, faster revenue growth than rivals and expanding broadband business strengthen its investment case. But the challenge is to convert that scale into higher customer spending and better returns on capital. Jio's average revenue per user remains below Bharti Airtel's, while its return on capital employed has declined. At the proposed valuation, investors must weigh its growth potential against the premium they are being asked to pay, according to analysts.

“Jio’s market leadership and growth opportunities support its long-term investment appeal," said Piyush Pandey, analyst for IT, Telecom at Centrum Broking. “However, investor returns will depend on the IPO valuation and its ability to translate subscriber scale into higher revenue per user, stronger cash flows and better returns on capital.”

The IPO comes as Jio seeks to build on its dominance across mobile connectivity, home broadband and digital services, including enterprise and cloud offerings in the world's most-populated nation. The entirely fresh issue, priced at ₹1,065–1,119 a share, opens on Wednesday and closes on Friday. At the upper end of the price band, Jio would command a market capitalization of about ₹10.3 trillion. Of the proceeds, ₹27,500 crore will be used to repay or prepay borrowings at subsidiary Reliance Jio Infocomm, helping reduce financing costs.

Jio Platforms’ shares commanded a grey market premium of ₹252, or about 22.5% above the upper issue price of ₹1,119, according to InvestorGain, signalling expectations of listing gains.

Scale meets concentration

Jio earns revenue from mobile connectivity, home broadband and digital services, including enterprise and cloud offerings. Telecom remains its financial backbone: Reliance Jio Infocomm contributed about 88% of consolidated revenue and 95% of Ebitda in FY26.

Industry consolidation supports that business. Telecom Regulatory Authority of India data show Jio and Airtel together held 77.32% of wireless mobile subscribers at the end of August and 83.95% of broadband subscribers, including wired and wireless connections.

Jio strengthened its subscriber base in FY26, adding 36.2 million customers to reach 524.4 million. It remained ahead of Airtel's India base of 482.4 million, while Vodafone Idea's subscriber count declined to 192.8 million.

Jio and Airtel's dominant positions give them significant pricing power, while selling additional services to existing users offers further growth opportunities, according to Centrum Broking.

Faster growth, weaker returns

Jio's consolidated revenue grew at a CAGR of 15.8%, from ₹1.10 trillion in FY24 to ₹1.47 trillion in FY26. Its net profit rose at an annual rate of 18.4% over the same period, from ₹21,423 crore to ₹30,049 crore. Ebitda grew at a CAGR of 17.8% to ₹76,255 crore in FY26.

To be sure, customer monetization remains below Airtel's. Jio's monthly average revenue per user (Arpu) was ₹214 in the March 2026 quarter, compared with ₹257.2 for Airtel's India mobile business. A tariff increase could help narrow the gap.

Saikat Kumar, a board member at Red Lions Capital and managing director of brokerage firm DIP Market, sees considerable scope to increase customer spending. At an unchanged base of over 500million customers, a ₹10 increase in monthly ARPU would translate into about ₹6,360 crore in additional annual revenue, before accounting for churn and changes in customer mix, he estimates.

“Jio can narrow the gap, but matching Airtel is a moving target,” Kumar said.

Jio's return on average capital employed fell from 12.83% in FY24 to 10.76% in FY26, while Airtel's reported measure rose from 14.8% to 19%.

Kumar attributed the gap to Jio's large invested-capital base and lower customer monetization. He expects a meaningful improvement around FY28–FY29 if monetization strengthens.

Anand Rathi Shares and Stock Brokers also said the company can increase the ARPU by moving 2G users to 4G and 5G networks and increasing data usage. Expansion in home broadband, enterprise technology and AI-based services can support future growth, especially as fixed broadband penetration is expected to rise from around 21% in FY26 to 46% by FY31,” said Narendra Solanki, Head - Fundamental Research - Investment Services, Anand Rathi Shares and Stock Brokers.

Growth beyond mobile

Tariff increases and broadband expansion could help close these gaps. Pandey expects a tariff increase of about 12% over the next three to four months.

Jio has built the largest 5G customer base outside China within three years of starting its rollout, Akash Ambani said at the press meet on Thursday. The company sees growth opportunities in mobile services, home broadband, enterprise offerings and international services. About 340 million industry-wide 4G and 5G additions are expected during FY26–FY31.

Jio had 27.1 million fixed broadband customers in FY26 and accounted for nearly 68% of the segment's net subscriber additions during the year, according to Emkay Global Financial Services' IPO note.

Less debt, more cash

Debt repayment will absorb about 91% of gross IPO proceeds. Meanwhile, cash capital expenditure fell from ₹53,510 crore in FY24 to ₹34,184 crore in FY26, while operating cash flow increased from ₹57,662 crore to ₹77,556 crore,.
Including spectrum and lease obligations, net debt stood at about ₹1.46 trillion in FY26, with net debt-to-Ebitda at 1.99 times, down from 3.2 times in FY24. Further deleveraging could improve financial flexibility, according to Emkay.

Kumar, citing Nomura's reported FY28 estimates, values Jio at 10.5–10.9 times EV/Ebitda, against 9.2 times for Airtel's India business—a premium of 14–18%. This comparison covers India telecom, unlike the consolidated capital-return comparison.

“At these multiples, Jio looks fairly priced for growth rather than clearly inexpensive,” Kumar said.