Home Financial Services Jio Financial Services Surprises Market :NBFCS Share Soars to Rs. 261.85, Leaving Reliance Industries Amazed

Jio Financial Services Surprises Market :NBFCS Share Soars to Rs. 261.85, Leaving Reliance Industries Amazed

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Jio Financial Services Surprises Market :NBFCS Share Soars to Rs. 261.85, Leaving Reliance Industries Amazed

New Delhi: Billionaire Mukesh Ambani’s new chocolate boy, Jio Financial Services (JFSL), has left all stalwarts of Reliance Industries (RIL) amazed today, as the price of the NBFCS unit’s share surged to Rs. 261.85 per share, much higher than brokerage estimates of Rs. 190.

During a special pre-open call auction session on Thursday at the stock exchanges,  (JFSL) quoted a market value of Rs. 261.85 per share on the NSE. Reliance Industries (RIL) saw a drop in share price to Rs. 2,580 as a result of the demerger, but it made a remarkable recovery of up to 2% after regular trading resumed at 10 AM.

Jio Financial Services:

A significant statement regarding the demerger of its financial services division was made by Reliance Industries (RIL) on July 20. According to the NSE methodology, (JFS), a recently constituted company, will be included to the Nifty and other indices on the same day.
This fixed price will be determined by subtracting the closing price of Reliance Industries (the demerger firm) on July 19 (the “T-1 day,” where “T” stands for the demerger’s effective date) from the price set on the July 20 “Special Pre-Open Session” (SPOS). For instance, the value would be Rs 150 if the shares of Reliance Industries closed at Rs 2,800 on July 19 (Wednesday) and closed at Rs 2,650 in the special pre-open session.

On July 19, after market hours, a dummy symbol would be introduced to Nifty to reflect this change. The RIL symbol’s shares, investible weight factor, and capping factor will all be represented by the dummy symbol in exactly the same ways.

Shares of (Reliance Strategic Investments Ltd.) would be distributed in a 1:1 ratio to Reliance Industries shareholders who held shares as at July 20. On July 20, when the scrip trades ex-date, this corporate move will have an effect on the share price of Reliance Industries. Investors will see the spun-off business, though, as it is included in the Nifty and other indices at a fixed price.

Nuvama stated that there is no fixed date for the listing of Jio Financial yet, but it might take a few weeks to get all the necessary approvals. Since separated from a major company, they expect the listing process to be expedited and it could potentially be listed in a month or even sooner.

Nuvama also mentioned two cases where listing processes took longer than a month. Piramal Pharma, separated from Piramal Enterprises, took around 45 days for listing after the record date. Similarly, NMDC Steel, separated from NMDC Ltd, took approximately 4 months for listing.

Regarding Jio Financial’s inclusion in derivatives, it won’t be automatically implemented as a stock must have at least six months of trading history to be eligible. After meeting the qualifying requirements, it needs SEBI clearance.

Owners of Reliance Industries (RIL) will receive equal shares of Jio Financial, with one share of Jio Financial for each share of Reliance they own.

The computed stock price for Jio Financial is higher than analysts’ predictions, mainly due to the market’s positive evaluation of the company’s potential. With a broad customer base through Reliance Retail and other business units of RIL, Jio Financial has significant growth opportunities. Experts believe the market is undervaluing this potential.

As of now, Jio Financial is valued at around $20 billion as a non-bank financial enterprise, while Reliance Industries is valued at $233 billion.

After the demerger, Jio Financial has become India’s fifth-largest lender and is ready to compete with major NBFC and fintech companies. Digitalization will play a crucial role in expanding their addressable market as India’s financial services sector grows, especially for merchant and retail loans.

Today, Reliance shares increased by over 1% in late transactions, trading at Rs 2,619.50. However, Jio Financial won’t be available for trading until it is officially listed on the market.

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