Jio is planning a huge initial public offering (IPO) in the first half of 2026. Analysts say the listing could act as a catalyst for rival Bharti Airtel, potentially lifting its share price.
Why Jio’s IPO Matters
When Jio goes public, investors will scrutinise its earnings and growth more closely. This pressure is likely to push Jio to raise mobile tariffs in 2026, which in turn could improve its profitability and make the stock more attractive.
Impact on Bharti Airtel’s Stock
Jefferies, a market research firm, believes Jio’s IPO will not be a drag on Bharti Airtel. In fact, the broker raised its price target for Airtel to ₹2,760, suggesting about a 32% upside from current levels. The reasoning is that Jio’s valuation will be linked to Airtel’s multiples, leaving little room for Airtel to be downgraded.
Once Jio joins major indices with roughly a 33% free‑float, the telecom sector’s weight in benchmarks like the Nifty 50 could rise from 4‑5% to 7‑8%. This extra index exposure may bring passive inflows that benefit both Jio and Airtel.
Sector Outlook: Tariff Hikes and Growth
The telecom sector is expected to see a 15% across‑the‑board mobile tariff increase in June 2026 – the first hike in two years. Higher tariffs should lift revenues, with analysts forecasting a 16% year‑on‑year revenue growth for the industry in FY27.
Even competitors such as Vodafone Idea may need sizable tariff hikes (about 45% over FY27‑30) to meet spectrum and tax obligations, indicating a broader move toward higher pricing.
Bharti Airtel’s Growth Drivers
- Revenue growth: Projected 17% YoY increase in FY27, driven by a 19% rise in Indian mobile services and 20% growth in international operations.
- EBITDA expansion: Expected 18% growth with margins staying around 56%.
- Free cash flow: Anticipated jump to about ₹540 billion, helped by capex staying at 20‑21% of sales.
- New businesses: Enterprise, data‑center and cloud services could add 1‑3% incremental growth each year.
Analyst Target Prices
Jefferies lifted its target price for Bharti Airtel from ₹2,635 to ₹2,760 and raised the target for Indus Towers from ₹425 to ₹510, reflecting confidence in the sector’s upside.
Disclaimer
Remember, this is perspective, not a prediction. Do your own research and consider your risk tolerance before making any investment decisions.