Jio Platforms Limited (Subscribe)

Highlights

Jio Platforms Limited (JPL) incorporated in 2019, is a technology company focused on digital connectivity, digital services and technology-led solutions in India. JPL has developed proprietary digital technology and pan-India connectivity infrastructure to support the delivery of digital services to consumers and businesses.

JPL platform is built on five integrated layers: (i) Digital products and services – consumer applications and enterprise solutions, (ii) Digital connectivity – including in-house developed network core, platforms and devices; (iii) Phygital access at scale – phygital distribution network; (iv) Deep customer insights – the customer data and analytics they process; and (v) Proprietary technology – comprising intellectual property portfolio and licensed trademarks.

For consumer’s JPL offers: (1) Digital Connectivity (4G, 5G, JioFiber, JioAirFiber) (2) Digital Entertainment (JioTV+, JioSaavn, JioGames, JioHotstar) (3) Cloud and Productivity (JioAICloud, JioPC) (4) Smart Home and IoT (Jio Set-top-box, JioHome) (5) AI Products (JioBrain, Google AI Pro) and for businesses JPL offers: (i) Enterprise Connectivity (JioBusiness, Internet Leased Line (ILL, MPLS77, VPN78) (ii) Enterprise IoT (JioThings, CPaaS) (iii) Cloud and Security (iv) Managed Services (Managed Network Operations Centre (NoC), unified communications) (v) Enterprise AI (JioBrain).

Through its material subsidiary, Reliance Jio Infocomm Ltd, the company offers 4G and standalone 5G mobile connectivity and has served 533.3 mn customers. Its wireless broadband network covered over ~99 pct of India’s population, while fixed broadband services covered approximately ~98 pct of India’s pin codes.

Out of the total proceeds of Rs. 302 bn, Rs. 275 bn would go towards prepayment, in full or in part, of certain outstanding borrowings availed by its Subsidiary, and remaining Rs. 27 bn would go towards funding general corporate purposes.

Key Highlights

• JPL is backed by Reliance Industries limited (Promoter). JPL leverage this reach to enable access to their own and third-party digital services supported by RJIL’s master distribution agreement with Reliance Retail for distribution of telecommunication services across its pan India retail network. In addition, JPL has created a media technology platform, which is also used by JioHotstar alongside their in-house technology stack.
• JPL’s technology platform powers multiple self-reinforcing flywheels, underpinned by AI and machine learning capabilities embedded across operations Their AI capabilities draw on large volumes of customer data that create a self-reinforcing flywheel of higher engagement, generating more customer insights, which in turn allows them to enhance customer experience.
• Since its launch in 2016, the company has transformed India’s digital connectivity through an all-IP 4G network, carrying 60 pct of India’s wireless data traffic.  It was India’s largest digital connectivity player, with 1.4x the 4G+5G subscribers of its nearest competitor, and ranked second globally in mobile data traffic.
• JPL has been at the forefront of telecom innovation, launching 4G VoLTE in 2016 and India’s first standalone 5G network in October 2022, deploying over 1mn 5G cells within a year and reaching ~285mn 5G subscribers. It developed an indigenous end-to-end 5G stack, including its core network, devices and OSS/BSS systems, supported by automation and in-house orchestration, making India the fifth country globally with indigenous 5G technology capabilities.
• JPL hold 26,800.8 MHz spectrum, with average remaining life of ~15.8 years and jas access to over 1 mn route km (or 30 mn + fiber pair km of which ~60+ pct is intracity) of fibre network. They are the only operator in India to have spectrum in low-band, mid-band and millimetre wave (700 MHz, 3300 MHz and 26GHz) spectrum for 5G.
• As of Q1FY27, the company and its Subsidiaries have applied for 7,220 patents, across 4G, 5G, 6G cloudnative core network architectures, AI-driven network automation, and other digital technologies within India and outside India and they are the only Indian company to be among the top 20 companies globally in the WIPO PCT rankings.
• JPL is evaluating the development of indigenous satellite constellations network and ground station infrastructure to provide satellite connectivity especially for remote areas. They are also evaluating partnerships with leading global constellation providers to accelerate service availability.

• Jio’s competitive strengths include its indigenous end-to-end 5G stack, proprietary UBR technology enabling cost-efficient fixed wireless access, and in-house device and software engineering. Its digital ecosystem spans applications with 362.6mn average monthly active users and enterprise solutions such as managed Wi-Fi and hybrid cloud, supported by AI-led network automation, predictive analytics and real-time anomaly detection to improve operational efficiency and customer experience.
• JPL’s key growth strategies include (i) To add new mobility consumers and extend its market leadership, (ii) transform digital connectivity and digital services at home, (iii) expand and deepen its business customer base, (iv) monetise its platforms in overseas market, and (v) leverage AI to build and deploy autonomous platforms across digital connectivity and other enterprise verticals.
• The sales of the company have grown by 15.8 pct CAGR over FY24-26 and EBITDA/ Profit has grown 17.8 pct CAGR/18.4 pct CAGR over same year. In FY26 the company reported sales of Rs. 1.469 bn rose by 14.56 pct YoY. EBITDA grew 18.8 pct YoY to Rs. 763 bn. In FY26 the company posted profit of Rs. 301 bn, which increased by 15.1 pct YoY. On Q1FY27 basis sales/EBITDA/profit grew 11.82 pct/15.05 pct/9.20 pct YoY.

Key Risk

• JPL’s operations depend on uninterrupted performance, reliability and availability of its network, any system disruption could adversely affect the business performance.
• JPL faces technological obsolescence risks if it fails to adapt to technological changes, including competitive satellite-based broadband services.
• JPL’s growth depends on securing and maintaining adequate, high-quality spectrum in a timely and cost-effective manner, any delays/shortfalls could affect its business.

Financial Performance

Peer Comparison based on FY26 Financials.

Source: – RHP.

Bharti Airtel’s ARPU is domestic, Vodafone Idea’s FY26 profits includes exceptional items of Rs. 588 bn.

Valuation

Jio Platforms Limited (JPL) is technology company with inherent engineering and full-stack proprietary capabilities, transforming digital connectivity and digital services in India. Despite operating in capex heavy industry, their balance sheet remains strong with net leverage improving from 0.88x in FY24 to 0.36x in FY26. The proposed repayment of RJIL’s borrowings is expected to lower leverage and finance costs, strengthen cash flows and provide financial flexibility for future investments. Further, mobile broadband penetration is still only 69.62 pct. Increasing disposable income, an improving device ecosystem and the proliferation of new use cases are all expected to accelerate mobile broadband adoption, deepen customer engagement and drive long-term average revenue per user (ARPU) uplift. At the upper end of the price band of Rs. 1119, the issue is priced at an TTM PE of 33.6x based on post issue capital. The issue appears to be fairly priced. Given the strong pedigree of the management and the large runway for growth, the company offers significant headroom for value creation.

Hence, one can subscribe this issue from a longer-term perspective.

Disclaimer: The views shared in blogs are based on personal opinions and do not reflect the company’s views. Investment involves risk, and it is advisable to consult a financial advisor before making any investment through the app. The decision to invest is solely that of the investor, and the company or its communication cannot be held responsible for it.