Citi sees SEBI proposal for IPOs easing path for Jio IPO, maintains buy on RIL with Rs 1,690 target price
Citi has maintained its buy rating on Reliance Industries (RIL) with a target price of ₹1,690, highlighting that proposed changes by the Securities and Exchange Board of India (SEBI) to minimum public offer requirements for large IPOs could have meaningful positive implications for a potential listing of Jio Platforms. Under the proposal, issuers with a post-IPO market capitalisation of more than ₹5,000 billion (about $57 billion) would need to dilute only 2.5% of post-issue capital, compared with the current requirement of 5%.
Citi values Jio Platforms at an enterprise value of $135 billion, with an equity value of over $120 billion. A 5% public offer would amount to more than $6 billion of share supply, a figure the brokerage described as large for the Indian market to absorb, particularly given that 35% of the offer must be reserved for retail investors. A 2.5% dilution, amounting to over $3 billion, would reduce supply overhang at the time of the IPO and limit concerns around holding company discount for RIL.
The brokerage said that the SEBI proposal, if implemented, could significantly smoothen the path for Jio's listing, providing investors with greater comfort on market absorption and valuation sustainability. Citi sees this as a structural positive for RIL's long-term unlocking of value from its digital and consumer-facing businesses.
Disclaimer: The views and recommendations made in this article are those of Citi. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.
Ahmedabad Plane Crash
Markets Desk at BusinessUpturn.com
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
30 minutes ago
- Yahoo
Carvana, Netflix, Duolingo, Robinhood, and Chegg Shares Plummet, What You Need To Know
What Happened? A number of stocks fell in the afternoon session after investor apprehension intensified ahead of a key policy speech and perplexing inflation signals clouded the economic outlook, leading to a wider market retreat from growth-oriented stocks. The downturn in the market was largely attributed to a significant sell-off in megacap tech and chipmaker shares. Nvidia, Advanced Micro Devices (AMD), and Broadcom all saw notable drops, dragging down the VanEck Semiconductor ETF. Other major tech-related companies like Tesla, Meta Platforms, and Netflix were also under pressure. A key reason for this trend is that much of the recent market gains have been concentrated in the "AI trade," which includes these large technology and semiconductor companies. So this could also mean that some investors are locking in some gains ahead of more definitive feedback from the Fed. The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Among others, the following stocks were impacted: Online Retail company Carvana (NYSE:CVNA) fell 4.3%. Is now the time to buy Carvana? Access our full analysis report here, it's free. Consumer Subscription company Netflix (NASDAQ:NFLX) fell 3%. Is now the time to buy Netflix? Access our full analysis report here, it's free. Consumer Subscription company Duolingo (NASDAQ:DUOL) fell 8.1%. Is now the time to buy Duolingo? Access our full analysis report here, it's free. Financial Technology company Robinhood (NASDAQ:HOOD) fell 6.8%. Is now the time to buy Robinhood? Access our full analysis report here, it's free. Consumer Subscription company Chegg (NYSE:CHGG) fell 7.7%. Is now the time to buy Chegg? Access our full analysis report here, it's free. Zooming In On Duolingo (DUOL) Duolingo's shares are extremely volatile and have had 34 moves greater than 5% over the last year. In that context, today's move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. The previous big move we wrote about was 1 day ago when the stock gained 13.5% on the news that it received bullish analyst coverage, including an upgrade from KeyBanc and a new 'Buy' rating from Citi. KeyBanc Capital Markets upgraded the stock to 'Overweight' from 'Sector Weight' and set a $460 price target, implying significant upside. Analysts at KeyBanc stated that the recent AI backlash was just 'a bump in the road' and that fears of AI hurting the digital-education app are 'overblown.' The firm highlighted Duolingo's product improvements and viral marketing as potential drivers for growth. Adding to the positive sentiment, Citi initiated coverage with a 'Buy' rating and a $400 price target. Citi's analysts argued that the stock price overstates AI-related risks and pointed to the company's potential for long-term growth. This wave of analyst confidence follows Duolingo's strong second-quarter results reported earlier in August, where it beat estimates and raised its full-year revenue forecast. Duolingo is up 4.5% since the beginning of the year, but at $340.66 per share, it is still trading 37% below its 52-week high of $540.68 from May 2025. Investors who bought $1,000 worth of Duolingo's shares at the IPO in July 2021 would now be looking at an investment worth $2,451. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
32 minutes ago
- Yahoo
India's complex GST tax and how Modi's reform will make goods cheaper
(Refiles to remove duplicated word and fixes a grammatical error in first paragraph.) By Nikunj Ohri NEW DELHI (Reuters) -Prime Minister Narendra Modi has proposed India's biggest tax reform in eight years to lower consumption levies on everyday goods and small cars from October, in a move seen as boosting his image amid trade tensions with Washington. The structure of the Goods and Services Tax (GST) is complex, with states and the federal government sharing the revenue collected. Here are details of the tax system and the planned reform: WHAT IS THE GOODS AND SERVICES TAX (GST)? India adopted the GST in 2017, sweeping in more than a dozen domestic state taxes in a bid to unify the economy on the principle of "one nation, one tax, one market". It was hailed as the biggest tax reform since independence from Britain in 1947. The new system had four tax slabs, of 5%, 12%, 18% and 28%, with scores of goods in each category. An additional levy was imposed above the tax of 28% on some items, such as cigarettes, luxury cars and high-end motorcycles. But it was criticised for being too complex. Pre-packaged salted popcorn is taxed at 12%, but caramel one at 18%, India said last year, triggering a dispute in which one online user questioned how a "salt caramel" variant would be taxed. Similarly, plain Indian flatbreads attract a 5% tax, but the flaky, multi-layered variety faces a levy of 18%. WHAT'S THE REFORM ALL ABOUT? The government plans to abolish the 28% slab that applied to products such as cars, air-conditioners and refrigerators. About 99% of products now taxed at 12%, such as butter, fruit juices, and dry fruit, would also shift into the 5% bracket. Reuters has reported small cars will be taxed at 18% down from 28% earlier. India collected $224 billion last year from the levies. IDFC First Bank says the new reform will hit government collections by $20 billion. WHICH SECTORS AND COMPANIES COULD BENEFIT? Taxes are likely to be lower on personal care items such as hair oil and toothpaste. Taxes on construction goods like cement could also be lowered, boosting demand for homes and infrastructure. Prices of air conditioners, televisions and refrigerators are also likely to be slashed as tax rates fall, benefiting manufacturers such as Samsung and LG Electronics. WHAT IS THE MACROECONOMIC IMPACT? The 18% category contributed the most - 67% - to GST collection, and that will not change. The tax cuts would damp inflationary pressures, and boost he chances for further interest rate cuts by the central bank, economists say. However, they are expected to boost consumption, which contributes roughly 60% of India's GDP. IDFC FIRST estimates India's nominal GDP increasing by 0.6 percentage points over 12 months. IS IT A DONE DEAL? No. Making changes to the GST framework is not easy. The plan will need approval from the GST Council, chaired by Finance Minister Nirmala Sitharaman and with representation from all Indian states, before it can roll out nationwide. Economists estimate tax cuts will affect state government finances more than the federal government, as goods and services tax form a large part of their revenues. In the past, states have pushed back on fixing rates on casinos, lotteries and online gaming. Sign in to access your portfolio
Yahoo
2 hours ago
- Yahoo
London's new stock market for private firms will be a big draw for billionaire investors
The London Stock Exchange Group's (LSEG.L) upcoming private securities market, powered by the Pisces framework, will be a transformative innovation that will open up liquidity in the private capital space, according to CEO David Schwimmer. The Private Intermittent Securities and Capital Exchange System (Pisces), proposed by the previous Conservative government and backed by Labour chancellor Rachel Reeves, will allow investors in private companies to sell shares on regulated exchanges. The London Stock Exchange Group is one of the companies planning to operate a Pisces trading venue, where shares could be traded on a limited number of days each year. "I think it's a good innovation," Schwimmer told Yahoo Finance UK, signalling his optimism about the platform's potential impact on both private companies and institutional players. The LSEG CEO explained how the platform would enable private companies to access public market infrastructure without going public. Read more: What you need to know about UK's private stock market Pisces "The private securities market that we are launching this year, which is on the Pisces framework, is a really interesting innovation for this market," Schwimmer said, adding that there has been a growing demand for liquidity among private companies. While many private companies today remain closed off to public investors, Schwimmer said that the market for private equity is expanding rapidly. "You have a lot of companies now that are sizeable and maybe looking for liquidity but do not want to go public", he explained. These companies may seek liquidity for their limited partners (LPs), shareholders, or employees, without leaping to a complete public listing. For Schwimmer, the Pisces platform solves this dilemma, offering access to the same infrastructure and liquidity typically reserved for publicly traded firms, filling a critical gap in the market. According to Schwimmer, one of the key advantages of the Pisces framework is that it can serve as a conduit for institutional investors, who in the past have had limited access to private companies. "Historically, institutional investors have not had a lot of access to private companies unless they get to participate in an opaque kind of one-off private placement process," he said, pointing to the exclusivity of most private equity transactions. By leveraging the structure of the London Stock Exchange, Pisces should give institutional investors more transparency and access to the growing pool of private market assets. Read more: London Stock Exchange open to dual listing of Indian companies, says LSEG boss Schwimmer also suggested that the Pisces framework could reshape how liquidity is accessed and managed in the private market. "This can be a great way for [private companies] to access effectively public market infrastructure on the London Stock Exchange," he said. Through Pisces, these companies would gain access to the trading systems and liquidity that are typically the domain of publicly listed firms. London's new Pisces private company stock market will launch later this year. A marketplace for private shares Pisces is intended to serve as both a showcase and an exchange for private companies seeking capital. Entrepreneurs will be able to organise scheduled trading events where they can offer existing shares to new investors, at prices they determine. Only pre-existing equity will be traded; the issuance of new shares will not be permitted on the platform. Firms wanting to operate a Pisces venue must first apply for authorisation from the Financial Conduct Authority (FCA). Once approved, they can host intermittent auctions that enable founders, early employees, or existing shareholders to realise some value without relinquishing control through a full-scale initial public offering. Read more: UK taxpayers 'subsidising' S&P 500, says LSEG boss Company owners will retain the right to screen prospective investors under current proposals. This power would allow them to block rivals from acquiring stakes or to prevent any single investor from amassing an outsized influence on the shareholder register. A lower-bar entry to equity liquidity Pisces could offer a lower-cost and more flexible alternative to public markets for fast-growing businesses. Unlike IPOs, which require extensive regulatory disclosure and the production of detailed prospectuses, companies listing on Pisces would face a significantly lighter disclosure burden. Supporters of the scheme argue that Pisces could enhance liquidity in private markets by enabling regular share auctions, helping attract a broader base of long-term investors to companies that might otherwise be overlooked. The platform is also expected to provide a cheaper route to equity liquidity than engaging investment banks to manage private placements. Adding to its appeal, the UK Treasury has pledged to exempt trades executed on Pisces from stamp duty, the 0.5% tax levied on share purchases on public exchanges. The exemption aims to improve liquidity and make UK equity markets more competitive globally. The Pisces proposals come amid broader efforts by the government and regulators to revitalise the UK's capital markets and encourage greater economic investment.
