Reliance demerger : Jio Financial shares valued at 261.85 apiece in special trading session

 


The pre-open session for Reliance Industries is over.  The share price of Jio Financial Services, a separate financial services entity of Reliance Industries, was listed higher at Rs 261.85 during a special trading session for the stock of Reliance Industries on Thursday.


 Reliance Industries stock was trading at Rs 2,618.95 per scrip in the Nifty 50 at 11:28 am today, while it closed at Rs 2,841.85 on Wednesday.


 According to a Reuters report, analysts had estimated that the share price of RSIL i.e. Reliance Strategic Investments (which will be renamed Jio Financial Services) would be between Rs 160 and Rs 190 per share.

 Meanwhile, the S&P BSE Sensex index was down 200 points at 66,890, while the Nifty 50 was hovering around the 19,767 level.


 India's most valuable company and billionaire Mukesh Ambani's Reliance Industries on Thursday demerged its financial services business as part of a move to unlock value.  For this, NSE had also organized a special session between 9-10 am this morning.


 Local stock exchanges on Thursday conducted a special 'price discovery' session for the first time to determine the price of Jio Financial Services shares.


 Reliance shares jumped 8 per cent after the company announced the record date of demerger on July 8.  The company's stock has gained 11.6 per cent so far this year, outpacing the 9.5 per cent gain in the blue-chip Nifty 50.



 The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) conducted 'trip-open call auction' sessions for Reliance on Thursday between 9:00 am and 10:00 am IST , taking Wednesday's closing price of Rs 2,841.85 as the reference price.


 A constant share price of Jio Financial Services will be determined by calculating the difference between the last close of Reliance and the settlement price of the stock at the end of the special session.


 After this, Reliance shares will trade on Thursday at the new price on all existing indices.  Though the stock of Jio Financial Services will be included in the blue-chip Nifty 50 including the index, it will not be traded till the listing.


 Reliance is expected to announce the date of listing of Jio Financial Services at the upcoming Annual General Meeting.

 As per the new norms, any newly listed business will be initially included in the index at a constant price, which is the difference between the closing price of the demerged firm on the day before the demerger and the price during a special pre-open session on the date of demerger.

 The demerged entity will be removed from the index at the end of the third day of listing.


Reliance had announced last October that it would spin off its financial services business – Reliance Strategic Investments – and go for a market listing, which would be renamed Jio Financial Services (JFS).

 For holding one share of Reliance, shareholders of Reliance will get one share of Jio Financial Services.


 The company has set July 20 as the demerger record date or cut-off date, which is used to determine which shareholders are eligible.

 Veteran banker KV Kamath will be the non-executive chairman and former ICICI Bank executive Hitesh Sethia will be the CEO.


 Analysts believe that JFS's access to large amounts of data and Reliance holding a non-bank finance company (NBFC) license will help the company in lending.  Certain Researches also said that the company would likely be an AAA-rated entity that could borrow at attractive rates.

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