Tariff hike now critical for Jio to accelerate ARPU ahead of IPO

It is time for Jio to take a call on a tariff hike. In seven quarters since the July 2024 tariff reset, Jio Platforms Ltd (JPL) has lifted average revenue per user (ARPU) by 17.8% to ₹214 from ₹181.7, even as its subscriber base expanded 7% to 524.4 million. The trajectory—price-led, then usage-led—now appears to be approaching its limits without another calibrated tariff push.

Start with the numbers. In Q1 FY25, Jio’s ARPU stood at ₹181.7, with a subscriber base of around 474 million. In the subsequent quarter, following a 12–27% tariff hike, ARPU rose sharply to ₹195.1. Momentum continued into Q4 FY25, with ARPU at ₹206.2 as the base grew to about 488 million. The pace moderated in FY26, with ARPU rising 3.8% to ₹214, signalling a shift from pricing gains to mix improvement.

That shift is visible in management commentary, and they believe organic levers—higher data usage, customer migration to richer plans, and increased subscription to new digital services—are expected to sustain 4–5% annual ARPU growth even without tariff intervention. “There is certain organic growth that we expect in ARPU realisations as customers continue to use more services,” said Anshuman Thakur, Head of Strategy, Reliance Jio Infocomm Ltd, in the Q4 analysts call. “People will tend to upgrade in the plans that they use and subscribe to some of the additional services that we are offering. So, you should expect some increase in the ARPU even without any tariff increases,” he said.

Even so, the gap with competition remains. The Q4 ARPU of Jio was effectively flat and continues to materially lag Bharti Airtel, said Macquarie analysts. The Sunil Mittal-led Airtel reported an ARPU of ₹259 in Q3, with analysts at BoFA Securities noting that the ARPU target set by Mittal is about ₹300.

In FY26, JPL’s operational revenue rose 14.6% to ₹1.47 lakh crore, while profit increased 15% to ₹30,053 crore. The company highlighted continued traction in 5G, with the subscriber base reaching 268 million as of March 2026 and accounting for about 55% of total wireless traffic.

Brokerages see tariff action as the next catalyst for JPL. Antique Stock Broking points to JPL’s IPO progress, potential tariff hikes, rising ARPU from 4G-to-5G migration, and continued broadband scale-up as key triggers. “Jio Platforms growth stays strong on subscriber adds and ARPU gains, with 4–5% YoY organic growth even without tariff hikes. Tariff hikes could come closer to IPO timing, though we expect listing may shift to end-2026,” it said.

Emkay Research noted that the company is in the advanced stages of filing its DRHP. “The tariff hike, initially anticipated in December 2025, has been pushed forward by the consensus to Q1FY27. The management commented that 4–5% ARPU growth can continue due to mix change, even without a tariff hike,” it said.

At a conservative valuation of around $130 billion, the JPL IPO is expected to be among the largest in India and will hinge on favourable liquidity conditions. Recent changes to listing norms allow companies with a post-issue market value exceeding ₹5 lakh crore to dilute a minimum of 2.5% equity, down from 5%. At this valuation, that would imply an IPO size of about $3.25 billion.

RIL holds a 66.4% stake in JPL, which houses a broad portfolio spanning its 5G mobile network, digital applications, home broadband, and enterprise solutions. Global technology majors Meta and Google own 9.99% and 7.73%, respectively, in JPL. The remaining stake is held by private equity firms and sovereign wealth funds, effectively enabling JPL to meet the minimum public shareholding requirement of 25% mandated by SEBI.