Jio Financial share price fixed at ₹261.85 after demerger; RIL up 1.5%

The demerger of Reliance Strategic Investments Limited (RSIL) from Reliance Industries took place today and the spun off entity, Jio Financial Services (JFSL) got listed as the 51st stock on Nifty 50. JFSL also joined 18 other NSE indices such Nifty 100, Nifty 200, Nifty 500, Nifty Energy, and Nifty Oil & Gas. The JFSL share has been temporarily listed on the bourses until it gets listed on the exchanges at a later date and is not tradeable. 

The National Stock Exchange (NSE) conducted a special pre-open session for Reliance Industries’ shares for one hour from 9 am to 10 am, to discover the stock price of the ex-demerged entity. The new share price of RIL ex-JFSL was discovered at ₹2,580 per share and that of Jio Financial Services was fixed at ₹261.85 per share after the special pre-opening session. 

The JFSL share price was derived based on the difference between the RIL's last closing price of ₹2,853 on the NSE on July 19 and the price discovered during the special pre-open session. Reliance share price settled at ₹2,580 apiece in special pre-open session on the NSE and ₹2,589 on the BSE. Post opening, RIL shares gained 1.6% to ₹2,622 on the NSE, while it climbed 1.5% to ₹2,628 on the BSE.

The oil-to-telecom conglomerate has fixed July 20 as the record date, which means those who have RIL shares as of closing on Thursday, will be eligible to get shares of Jio Financial Services. The ratio for demerger is set at 1:1, which means for every share of RIL held before the record date, the company will award 1 share of JFSL. With RIL’s financial business moving to JFSL, it will own a 6.1% stake in Reliance Industries.

Ahead of the demerger, the board of RIL has declared the cost of the acquisition of Reliance and Jio Financial, and the financial results of RSIL. The cost of acquisition for RIL would be 95.32% while the rest 4.68% for RSIL.

For the quarter ended June 30, 2023, RSIL recorded net profit after tax at ₹145.7 crore against a loss of ₹1.84 crore in the year ago period. The company had posted a profit of ₹31.25 crore in March 2023 quarter. The total income from operations stood at ₹214.57 crore in June quarter compared with ₹44.84 crore in the March 2023 quarter and loss of ₹14.03 crore in the corresponding period last year.

The RIL’s board approved the appointment of Hitesh Kumar Sethi as managing director and chief executive officer of the new entity for a period of three years, subject to the Reserve Bank of India’s approval. Isha Mukesh Ambani and Reliance executive Anshuman Thakur have been appointed as non-executive directors.

Besides, former Union Home Secretary Rajiv Mehrishi, former MD and CEO of Punjab National Bank Sunil Mehta, and Bimal Manu Tanna, a chartered accountant who worked with PwC, have been appointed as independent directors on the board of RSIL. “The directors will be appointed for a term of five consecutive years up to July 6, 2028, subject to the approval of the members.”

Reliance has been building a vibrant financial services platform to create value for every stakeholder. JFSL is uniquely positioned to capture multiple growth opportunities in financial services bringing millions of Indians into formal financial institutions. It will be a technology-led business, delivering financial products digitally by leveraging the nationwide omnichannel presence of Reliance’s consumer businesses, as per the company.

JFSL plans to acquire liquid assets to provide adequate regulatory capital for lending to consumers and merchants. Besides, it will incubate other financial services verticals such as insurance, payments, digital broking, and asset management for at least the next three years of business operations.

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