The demerger of Jio Financial Services from Reliance Industries Ltd (RIL) is a significant event in the Indian financial market. This move is expected to unlock value for RIL and shift all its financial business to Jio Financial Services Ltd (JFSL), which owns a 6.1% stake in RIL.
Key Points:
Demerger Details: The demerger record date was set for 20th July 2023. Post demerger, JFSL’s valuations are expected to be around ₹10,000 crore.
Share Price Impact: The demerger led to a surge in the Reliance share price, hitting a fresh 52-week high of ₹2,845.00 apiece on BSE on July 19. This was due to the expected value unlocking from the demerger.
Share Distribution: RIL shareholders will be awarded Jio Financial Services shares in a 1:1 ratio after the JFSL record date for demerger. This means that buying Reliance shares is a way to acquire Jio Financial Services shares at a potentially lower rate, as the JFSL share price may increase significantly after listing.
Price Discovery Session: On the morning of July 20, 2023, a special price discovery session took place for RIL. This session helped determine the adjusted share price of RIL after the demerger of Jio Financial Services.
Future Expectations: Market experts are bullish on Jio Financial Services shares after listing on Indian bourses. The listing price is expected to be around ₹150 to ₹200 apiece levels and may soon skyrocket due to expected substantial trade volume.
Strategic Move: The demerger decision is taken to keep the financial service business distinct from other businesses and may attract a different set of investors, strategic partners, lenders, and other stakeholders. Post demerger, the aim is to branch out to insurance, payments, digital broking, and asset management.
Future Plans: Through the JFSL demerger, RIL has started its value unlocking plans, and the market is expecting the listing of Reliance Retail and Reliance Jio in the medium to long term on the same pattern.
Please note that these views are based on the analysis of individual market experts and investors are advised to check with certified experts before making any investment decisions.