Jio IPO: Will Bharti Airtel Shares Gain Momentum in the Coming Weeks?

Synopsis: A record-breaking listing is about to reshape India’s telecom story. As one telecom giant prepares to go public, brokerages are split on what it means for its biggest rival’s stock in the weeks ahead.

India’s telecom sector is entering an interesting phase. A hugely anticipated IPO is moving through regulatory review, and it’s got investors asking hard questions about the sector’s second-largest player. Some brokerages see a re-rating story building. Others are more cautious. Here’s a closer look at where the debate stands.

A Tale of Two Views on Airtel

Jio Platforms filed its draft papers with SEBI in June, setting the stage for what could turn out to be India’s biggest-ever public offering. As the listing inches closer, the question on everyone’s mind is simple: does this help Airtel, or does it hurt it?

Morgan Stanley leans toward the optimistic camp, though its reasoning has less to do with Jio and more to do with Airtel’s own business momentum. The brokerage has kept an ‘Overweight’ rating on the stock with a target price of ₹2,480, pointing to steady execution through the June quarter and continued ARPU growth as customers keep moving up from older networks to 5G. Its real conviction, though, rests on a tariff hike it expects later this year – somewhere in the 16-20% range for 4G and 5G plans – which it believes could unlock stronger earnings, better return on capital, and healthier free cash flow over the next few years.

JM Financial holds a similar buy stance, with a target of ₹2,450. The brokerage expects a steady quarter ahead, backed by mobile broadband additions and gradual ARPU improvement, and sees industry-wide ARPU growing at a healthy pace through FY28 as tariff hikes and premium plans do their work.

There’s also a more direct Jio angle in the bullish case. Elara Capital has flagged that Airtel is trading at a discount to Jio’s expected IPO valuation, arguing this gap could close once the comparison stops being theoretical. The same note lists Airtel’s upcoming Airtel Money IPO in Africa, its data centre push, and its growing stake in Indus Towers as additional levers that could support a re-rating, with a target price of ₹2,427.

Why Some Brokerages Are Holding Back

Not everyone is on board with the optimism, though. Emkay Global has kept a ‘Reduce’ rating on Airtel, with a target of ₹2,000 – well below where the other brokerages are pointing. Its concern isn’t about Airtel’s operations, which it acknowledges are solid, especially in Africa. 

The worry is more structural: as Jio’s IPO opens up, some fund managers may need to trim their Airtel holdings just to keep their overall telecom allocations balanced, since a chunk of fresh money will likely flow toward the new listing instead. That kind of shift could weigh on Airtel’s stock in the near term, even if nothing changes in the company’s underlying performance.

There’s a valuation worry too. Jio’s expected IPO pricing puts its value close to Airtel’s own market cap, and some analysts think that narrow gap could limit how much premium Airtel can realistically hold on to once Jio starts trading.

So, What Happens Next?

Put together, the picture is far from settled. Airtel’s core business – steady subscriber growth, an expanding non-mobile portfolio, and improving cash flows – looks solid on its own terms. But how the stock actually moves in the coming weeks may depend just as much on how the Jio listing unfolds and whether the widely expected tariff hike finally comes through.

What Should Investors Watch

Going forward, a few things will likely decide which way Airtel’s stock swings. First, the actual pricing and demand for the Jio IPO – a strong subscription could pull capital away from Airtel in the short term, while a modest one might ease those rotation worries. Second, whether the widely expected tariff hike actually comes through later this year, since brokerages across the board see this as the bigger driver of Airtel’s own earnings. 

Third, how Airtel’s other growth bets – the data centre business, financial services push, and the upcoming Airtel Money listing in Africa -progress, since these give the company levers beyond the core India mobile business. Investors would do well to track all three rather than reacting to IPO headlines alone.

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