Shares of Jio Financial Services, the demerged financial services arm of Reliance Industries, listed flat on the domestic exchanges at Rs 265 apiece on Monday. However, the share price jumped 6.2% to touch Rs 278.20 apiece before paring all gains to trade 4.5% in the red at Rs Rs 248.90. Ahead of the listing, during a special pre-open session on July 20, the discovered share price for JFS was Rs 261.85, beating analysts’ expectations of Rs 160-170 apiece.
With a market capitalisation around Rs 1.6 lakh crore, Jio Financial Services is set to emerge as India’s second largest listed NBFC, coming in second after Bajaj Finance that boasted of a Rs 4.2 trillion market cap, edging out Cholamandalam Investment and Finance. JFSL’s market cap will overshadow many Nifty 50 giants such as Britannia Industries, Hero MotoCorp, and Grasim Industries.
Removal from Nifty 50, Sensex
Following the third day of its listing, i.e. Wednesday, 24 August, Jio Financial Services shares will be excluded from blue-chip benchmarks, Nifty 50 and Sensex. Assuming the hypothetical price scenario for JFSL on its Trading (T) + third day of listing at Rs 261.8/share, Nuvama Alternative & Quant Research suggested that the Nifty 50 index passive trackers could offload 90 million JFSL shares, equivalent to around $290 million. On the other hand, Sensex trackers would sell around 55 million shares, worth $175 million.Jio Financial Services will be eligible to enter the indices during the next rejig cycle.
About the Reliance Industries demerger
Reliance Industries demerged its financial services unit Reliance Strategic Investments. Under the scheme of the arrangement, Reliance Strategic Investments allotted one fully paid-up equity share of RSIL of face value of Rs 10 each, for every share of Reliance Industries held. Reliance Strategic Investments was renamed Jio Financial Services (JFSL).