Reliance Jio IPO to be listed soon: Why a 12% tariff hike may be coming in 3-4 months? Experts explain reasons

Amid growing buzz around Reliance Industries Limited-backed Jio Platforms’ initial public offerings, telecom users can see a 12% tariff hike over the coming three to four months. The pricing environment has become favourable due to the presence of limited players in the industry. Hence another 12-15% tariff hike is expected over next three to four months, according to a Centrum report.

Reliance Jio to continue gain subscriber market

Reliance Jio would continue to gain in the subscriber market share at the expense of Vodafone Idea Limited, according to Centrum experts. Reliance Jio is likely to add 7 million subscribers on a sequential basis to 531 million. Its Average Revenue Per User (ARPU) may grow by 1% QoQ to ₹216 per month. The growth will be led by 5G FWW addition and higher number of days in the quarter.

Another 12%-15% hike expected in few months

The brokerage highlighted that the limited number of firms in the telecom industry has made the pricing environment more favourable.

“Reliance Jio and Airtel are also seeing strong traction in terms of 5G FWA and fixed broadband addition as penetration in the segment remains low. The pricing environment has become more favourable with only 3+1 players and we expect another 12-15% tariff hike over next 3 to 4 months,” stated the report.

Key growth levers of Reliance Jio IPO

Tariff hikes are among the biggest growth levers for the Reliance Jio IPO. The company has also said that its ARPU has significant headroom for growth. 2G upgrade, home broadband penetration, enterprise SME, AI automation, stellite are among the key growth levers for Jio Platforms.

Akash Ambani: ‘Reliance Jio has the potential to increase mobile tariffs, but’

Reliance Jio has the potential to increase mobile tariffs but it would prefer to drive revenue growth by offering digital services to customers, said Managing Director of Jio Platforms, Akash Ambani.

Jio IPO

Jio IPO upper price band is fixed at ₹1,065 to ₹1,119 per share. The IPO will close on Friday, October 23, with anchor bidding scheduled for Monday, October 19. Reliance Industries Limited (RIL) owns 66.43% of Jio Platforms.

Jio Platforms, the telecom and digital services arm of Reliance Industries, will open its initial public offering on October 21, according to its red herring prospectus. It will be the listing of India's largest mobile carrier by subscribers.