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- Jio IPO Opens Earning Path, New Energy & AI Drive Growth; Reliance Stock Up
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Reliance Industries (RIL) shares are up by more than 2% during trading today. The company’s shares have reached the level of ₹ 1,345. After the 49th Annual General Meeting (AGM) held on Friday, many big brokerage houses have released their analysis report regarding its future roadmap and the Draft Red Herring Prospectus (DRHP) filed with SEBI for the IPO of Jio Infocomm.
Jio’s IPO and value unlocking
- According to Nomura brokerage, Jio’s listing will unlock the value of the digital business within Reliance.
- This will prove to be a great entry point for new investors who want to invest only in telecom business.
- Nomura has maintained its ‘buy’ rating on Reliance shares and set the target price at ₹1,640.
Reliance Intelligence: Plan for AI Hub
Nomura said in his report that ‘Reliance Intelligence’ has now moved from the planning phase to the execution phase. The first 120 megawatt (MW) capacity is being targeted by the end of financial year 2026 in the Sovereign Artificial Intelligence (AI) Hub being built in Jamnagar. This is a large initial phase capex investment for Reliance.
Oil-to-Chemicals and Dahej-Nagothne Projects
According to Emkay Global, the next phase of growth in the oil-to-chemicals (O2C) segment will come from investments in high-value chemicals and materials. The 3 mmtpa capacity PTA project at Dahej is progressing rapidly, which will strengthen Reliance’s position in the polyester value chain.
The 1.2 mmtpa capacity PVC project at Nagothane will reduce India’s import dependence and meet the domestic demand of infrastructure, construction and consumer segments. MK Global has a buy rating on the stock with a target price of ₹1,680.
Target to double EBITDA in 5 years
Antique Stock Broking said the company aims to more than double its consolidated earnings before interest, tax, depreciation and amortization (Ebitda) in the next five years.
This means that this EBITDA could reach ₹4.2-4.5 trillion by FY 2031. If this happens, the return on capital employed (ROCE) may double, which will lead to re-rating of the share.
New Energy and Jio’s trigger
Antique Stock Broking believes that after Jio’s IPO, the re-rating of Reliance will continue in the market due to the commissioning of 10 GW integrated solar project and 40 GW battery plant this year.
After this, solar + battery and hydrogen projects will also start in Kutch. The brokerage has reiterated buy rating with a target of ₹1,670.
Digital segment will remain the growth driver
According to Motilal Oswal Financial Services, Reliance Jio will continue to be the company’s biggest growth driver and the digital segment will contribute about 80% of Reliance’s total incremental EBITDA.
We are likely to see an EBITDA CAGR of 18% between FY 2026-28 driven by wireless tariff hike (15% increase in Q2FY2027), wireless market share gain and expansion of the Homes and Enterprise segment.
Capex reduction and free cash flow
- Motilal Oswal estimates that Reliance’s consolidated EBITDA and PAT will grow at a CAGR of 9-10% during FY 2026-28.
- The peak phase of capex in digital services is now over, so annual consolidated capex for FY 2026-28 is estimated at ₹1.25 trillion.
- This will generate strong free cash flow (FCF) of approximately ₹1 trillion and reduce consolidated net debt (debt). The brokerage has given a target price of ₹1,655.
Nuvama’s Outlook and Risk Factors
According to Nuvama, the new energy business will start making a major contribution to the financial performance from FY 2027. The capacity of commissioned solar module/cell plants is being increased to 20GW, which can lead to a 5% increase in Profit After Tax (PAT) for FY 2026.
Reliance Intelligence (RI) and Reliance Consumer Products (RCPL) will be the new growth engines of the company. Nuvama has given a target price of ₹1,765, but also cautioned that slowing global demand or capacity addition could impact refining and chemical margins.
What is DRHP?
The draft red herring prospectus is the initial official document that any company submits to market regulator SEBI before launching its IPO. It contains complete details of the company’s business, financial position and risk factors.
What do EBITDA and CAGR mean?
EBITDA stands for Earnings Before Interest, Tax, Depreciation and Amortization, which reflects the core operating profitability of the company. CAGR (Compound Annual Growth Rate) is used to measure the average annual growth of investment or earnings over a period of time.
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Jio’s IPO will come, it will be the biggest in the country: Plan to raise ₹37,700 crore from 27 crore shares; Medical City, Vantara University will also be built in Mumbai
The 49th annual meeting, i.e. AGM, of Reliance Industries was held on Friday, June 19. Company Chairman Mukesh Ambani addressed about 44 lakh shareholders. He said that the company is entering the markets of Europe and Africa. At the same time, the company is also going to bring IPO of Jio Platforms.
Ambani said that the draft documents (DRHP) for the IPO have been submitted to SEBI on June 19 itself. The company will issue 27 crore new shares and plans to raise about $4 billion i.e. ₹37,700 crore through IPO. Read the full news…
