Jio Platforms could introduce a dividend distribution policy from the next financial year, with as much as 50% of its free cash flow being returned to shareholders, according to Deven Choksey, Managing Director of DRChoksey Finserv Private Limited.
Jio Platforms IPO opened for subscription today, October 21.
Choksey said the telecom and digital services company has entered a phase where heavy capital expenditure is largely behind it, allowing it to generate higher free cash flows.
He expects this to support both shareholder returns and sustained earnings growth in the years ahead. Choksey also reiterated that he sees Jio Platforms’ fair valuation at ₹12 lakh crore, around 20% above the IPO valuation of ₹10 lakh crore.
“I would not be surprised if they announce at least 50% of free cash flow as a distribution policy for the investors,” Choksey said. He added that Reliance Industries, which owns around 63% of Jio Platforms, would be the largest beneficiary, while new public shareholders and long-term institutional investors such as insurance companies could also benefit from regular dividend payouts.
Choksey believes Jio Platforms is well placed to sustain double-digit revenue and EBITDA growth as it expands beyond its telecom business. He said growth in home broadband, enterprise connectivity and the company’s artificial intelligence initiative, JioBrains, could create new revenue streams.
“The surprising pack would be the JioBrains, which could possibly start enrolling a B2B2C model going forward with some of the larger telcos in the Western markets,” he said. According to Choksey, higher enterprise and home broadband revenues are likely to lift profitability as these businesses scale.
He also expects average revenue per user (ARPU) to rise over time, driven more by increased data consumption than tariff hikes. Jio’s digital ecosystem, spanning agritech, healthtech, media, sports and e-commerce applications, is expected to increase data usage across its subscriber base.
“I believe that the possibility of generating 20% compounded annual growth rate (CAGR) growth in the next four to four-and-a-half years at the earnings before interest, taxes, depreciation, and amortisation (EBITDA) level on a larger size is distinctly possible for this company,” Choksey said.
Commenting on Bajaj Finance, Choksey said the lender continues to differentiate itself through early adoption of artificial intelligence across customer acquisition and loan processing. He expects the company to maintain 25-30% business growth, supported by technology-led efficiencies and continued expansion of its loan book.
According to Choksey, AI is helping Bajaj Finance improve customer onboarding, lower transaction costs and strengthen profitability, positioning it ahead of many private sector banks and non-banking financial companies.
For the full interview, watch the accompanying video
Jio Platforms may announce 50% free cash flow dividend policy next fiscal: Deven Choksey
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Disclosure: Reliance Industries Ltd, which owns Jio, is the sole beneficiary of Independent Media Trust that controls Network18, the parent company of CNBCTV18.com.
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