The listing of Jio Financial Services Limited (JFSL), the demerged financial division of
Reliance Industries Ltd, is equivalent to a mini bonus for our long-term investors, RIL Chairman and Managing Director Mukesh Ambani said while addressing shareholders at the 46th annual general meeting (AGM) of the company on Monday.
Every shareholder of
Reliance has received shares in
JFSL on a 1:1 basis following the recent demerger of the financial services business, Ambani said.
"JFS has been conceptualised to fill a critical gap in the financial services needs of a large section of the Indian economy, mainly in the informal and underserved sectors in rural, semi-urban, and urban areas. This will give a big boost to inclusive and accelerated growth of the economy," the RIL Chairman said.
According to Ambani, just like Jio and Retail,
Jio Financial, too, will prove to be an invaluable addition to the Reliance ecosystem of customer-facing businesses. He gave
three reasons behind it:
1. The digital-first architecture of JFS will give it an unmatched headstart.
2. This is a highly capital-intensive business. Reliance has capitalised JFS with a net worth of Rs 1.2 lakh crore (one of the highest capital for any financial services business in the world).
3. JFS is being led by KV Kamath, a financial sector veteran, who formerly led ICICI Bank and then, later, the BRICS Bank.
The RIL Chairman believes that JFS will massively increase financial services penetration by transforming and modernising them with a digital-first approach that simplifies financial products, reduces the cost of service, and expands reach to every citizen through easily accessible digital channels.
He also said that JFS plans to democratise financial services for 1.42 billion Indians, giving them access to simple, affordable, innovative, and intuitive products and services."
JFSL share price
Jio Financial shares, which demerged from incubator Reliance Industries last month, got listed last week on BSE at a share price of Rs 265. On NSE, the listing price was Rs 262. The listing price was near the exchange-derived price of Rs 261.85 apiece on the demerger record date of July 20.
"JFSL will go with the India story and the story of being a digital-first institution," JFSL's non-executive chairman KV Kamath had said at the listing ceremony held in BSE.
Minutes after listing, JFSL shares witnessed booking profits. Amid multiple block deals, the JFS stock hit 5 percent lower circuit limits on both exchanges.
On Monday, the stock rallied 4 percent to hit an intra-day high of Rs 222.25 on NSE ahead of Reliance's AGM. The stock swung repeatedly between gains and losses in extremely volatile trading sessions.
With today's gain, Jio Financial is commanding a market capitalisation of Rs 1.40 lakh crore, as against Rs 1.68 lakh crore at the time of its listing.
"Fair value of JFS shares come at around Rs 150 to Rs 160. So, the stock may continue to remain an ideal sell-on-rise stock on Dalal Street as the market cap of the stock at the time of demerger was around Rs 1.10 lakh crore. However, due to the heavy buying of Reliance shares ahead of the demerger, it appreciated to the tune of 60 to 65 percent. Hence, correction in the stock post-listing was expected," said Saurabh Jain, Vice President of research at SMC Global Securities.
Shares of parent Reliance Industries closed 1.27 percent lower at Rs 2,436.95 apiece in trade today. The stock gained 4 percent in the last six months, while it fell 6 percent in a year.
First Published: Aug 28, 2023 3:06 PM IST
