RIL may be aiming to list Jio after attaining debt-free status

The aim of Reliance Industries is to make Jio debt-free by transferring the liabilities of up to Rs 108,000 to a new entity and then move towards listing the telecom arm at a later date and benchmarking it to the global peers.

"Large platform companies are debt-free, typically. Benchmarking to peers like Alphabet, Amazon, Alibaba, Facebook, Tencent and Apple," RJio said in a presentation.

On IPO issue, Jio network president Mathew Oommen had recently told the listing had not been discussed.

RIL CMD Mukesh Ambani has said, consolidation of liabilities in RIL is to create an efficient structure to manage debt and cash, and will ensure monetisation opportunities accrue to shareholders efficiently.

Industry and investment banking sources said de-leveraging of Jio balance sheet and trying to match with tech giants, like Alphabet and Alibaba, were aimed at creating a brand and strong balance sheet.

Jio is a profit-making company and with its decision to go pay-on-voice may further add to top and bottom lines, sources said on condition of anonymity.

As per the Jio presentation quoting data from CapitalQ, Alphabet has a market cap of $861,202 million, total debt of $14,226 million and net debt of $106,830 million.

Amazon has a market cap of $873,429 million, total debt of $71,614 million and net debt of $30,151 million.

Alibaba Group has a market cap of $442,321 million, debt of $20,297 million and net debt of $11,828 million.

Facebook has a market cap of $520,207 million, debt of $8,204 million and net debt of $40,392.

Tencent has a market cap of $396,730 million, total debt of $30,817 million and net debt of $3,946 million.

Apple Inc has a market cap of $1,084,422 million, total debt of $108,418 million and net debt of $102,192 million.

RIL will invest Rs 1.08 lakh crore through a rights issue in a wholly-owned subsidiary to use the proceeds to invest in Reliance Jio Infocomm with the aim of making the telco virtually net debt-free by March 31, 2020. After the transaction, Jio, with over 355 million users, will have about Rs 40,000 crore of mainly spectrum-related debt on books.

"RJIL (Jio) will become virtually net debt-free by March 31, 2020, with the exception of spectrum-related liabilities," RIL said.

Jio's quarterly profit increased to Rs 990 crore from Rs 681 crore a year ago. The market had estimated a profit of more than Rs 1,000 crore. Profit rose 11 per cent from the preceding quarter.

( With inputs from IANS )