The share price of Jio Financial Services, the spin-off financial services unit of Reliance Industries, unexpectedly rose to Rs 261.85 during a special trading session dedicated to its parent company’s stock on Thursday.
On Thursday, Reliance’s stock was trading at Rs 2,580 per share, against Wednesday’s previous closing price of Rs 2,841.85.
Market analysts had initially estimated the share price of the entity named Reliance Strategic Investments, which will now be known as Jio Financial Services, which will be priced between Rs 160 and Rs 190 per share.
While JFS stocks have been included in major indexes, including India’s benchmark Nifty 50, it will remain inactive until formal listing.
The date of the specific list is expected to be announced at Reliance’s upcoming Annual General Meeting.
Shareholders of Reliance Industries will get one share of Jio Financial Services for every share held in Reliance.
Demerger is seen as a strategic move by oil-to-retail company, Reliance, to expand its presence in the financial services sector. This expansion will be facilitated using the license of a non-bank financial company held by the collective.
In addition, Jio Financial Services (JFS) will benefit from substantial data access from Reliance’s telecom and retail businesses. Analysts believe that this data facility will enable JFS to start lending operations. According to Macquarie Research, JFS can achieve an AAA rating, so that it can borrow at attractive interest rates.
According to analysts, Jio Financial Services has a lot of potential.
It is well positioned to capitalize on the growing demand for financial services in India. The company has a strong management team and a good track record.
Since DeMarzer’s record date announcement on July 8 (which was originally announced in October), Reliance shares have gained 8%.
