Jio Financial Demerger: RSIL Shares Surpass Street Estimates, Set for Listing

Rajesh
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In a significant move, Reliance Strategic Investments Ltd (RSIL) is set to be demerged from Reliance Industries Ltd (RIL) and will be renamed Jio Financial Services (JFS). This demerger, which took place on July 20th, is expected to pave the way for RSIL's listing on the stock exchanges at a later date. The shares of RSIL were discovered to be trading at a much higher price than analyst estimates, indicating strong investor confidence in the new entity.

RSIL Share Price and Value:

At the end of a special trading session, RSIL shares were valued at Rs 261.85, exceeding analyst estimates of Rs 160-190 per share. Nuvama Research predicts that Nifty 50 Index passive trackers may potentially sell around 90 million shares of RSIL, amounting to approximately $290 million. With this, RSIL's total valuation is projected to reach around Rs 1.45 trillion.

Implications for RIL:

The demerger will result in RIL owning a 6.1% stake in Reliance Industries after its financial business is transferred to Jio Financial Services. RIL's stock settled at Rs 2589 per share on BSE from its previous close of Rs 2853 per share.

Shareholders' Scheme of Arrangement:

As part of the scheme of arrangement, shareholders of RIL will receive one share of the demerged entity, Reliance Strategic Investments, for each share they hold in the conglomerate. However, it's important to note that the new RSIL stock is not tradable yet and will remain in Nifty 50 at a constant price until the official listing date is announced. It will then be removed from Nifty 50 three days after the listing.

Business and Expansion Plans:

Jio Financial Services primarily operates in the Non-Banking Financial Company (NBFC) market and credit market segment. The company has strategic plans to expand its operations into the insurance, digital payment, and asset management verticals. This diversification is expected to bolster the company's position in the financial sector and tap into new growth opportunities.

Leadership Appointments:

To steer the company's growth initiatives, Jio Financial Services has made significant leadership appointments. Isha Ambani, a prominent figure in the Ambani family, has been appointed as a non-executive director on the board of JFSL. Additionally, Hitesh Sethia, a former executive of ICICI, will take on the role of the new CEO and MD. These appointments are expected to strengthen the company's leadership team and drive expansion across various sectors.

Conclusion:

The demerger of RSIL from RIL and its transformation into Jio Financial Services mark a significant step in the financial landscape. With the discovery of RSIL shares at a much higher price than anticipated, the entity's potential for growth and success in the financial markets looks promising. As the company gears up for listing on the stock exchanges, investors are keenly watching the developments and awaiting the announcement of the official listing date.


Also Read : Top Pharma Stocks Set to Trade Ex-Dividend with Potential Returns of 400% & 600%

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