Centrum India sees Jio Platforms IPO as catalyst for telecom sector re-rating

Piyush Pandey, Senior Vice President at Centrum India, says the proposed Jio Platforms initial public offering could re-rate listed telecom stocks, depending on its valuation and market response. He values the company at roughly ₹12 lakh crore, and the public issue could be priced at a modest discount to that valuation. The listing, he notes, could support valuations across the telecom sector.

Pandey also expects the larger prepaid segment to drive the next leg of revenue and average revenue per user growth for telecom operators. He points to Bharti Airtel’s decision to raise postpaid tariffs as a first step toward broader price increases, with prepaid tariff hikes likely over the next three to five months. Airtel’s postpaid business contributes about 10‑12% of its wireless revenue, and the latest increase could lift the company’s overall revenue by around 1% sequentially once fully reflected in earnings.

The market is looking beyond postpaid pricing, with a projected 10‑12% increase in prepaid plans over the next three to five months, Pandey says. A prepaid tariff hike would have a more meaningful impact on ARPU because prepaid subscribers account for the bulk of telecom revenues. He expects rival operators to follow Airtel’s pricing actions, noting that Vodafone Idea could benefit more if it implements similar tariff increases, given postpaid accounts for about 12‑13% of its revenue mix.

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