BackRIL to demerge and list financial services business as Jio Financial Services Ltd
RSIL is currently a wholly-owned subsidiary of RIL and is a RBI-registered non-deposit taking systemically important NBFC
PremiumMUMBAI : Mukesh Ambani’s Reliance Industries Ltd (RIL) on Friday said that it will demerge its financial services business and list it separately on the stock exchanges under Jio Financial Services Ltd, in a move to tap the growing demand for new age financial services for retail and small-business customers, the company said in a statement.
“The board of directors of RIL, at its meeting held today, approved a scheme of arrangement amongst RIL, Reliance Strategic Investments Limited (RSIL) and their respective shareholders and creditors in terms of which, RIL will demerge its financial services undertaking into RSIL, to be renamed Jio Financial Services Limited (JFSL)," the statement said.
RSIL is currently a wholly-owned subsidiary of RIL and is a RBI-registered non-deposit taking systemically important NBFC.
Shareholders of RIL will receive one equity share of JFSL for one share.
“Jio Financial Services will be a truly transformational, customer centric and digital-first financial services enterprise offering simple, affordable, innovative and intuitive financial services products to all Indians. JFS will be a technology-led business, delivering financial products digitally by leveraging the nation-wide omni-channel presence of Reliance’s consumer businesses. JFS is uniquely positioned to capture multiple growth opportunities in financial services bringing millions of Indians into formal financial institutions," said Mukesh Ambani, chairman and managing director, RIL.
RIL added that through the demerger scheme, Jio Financial Services will acquire liquid assets to provide adequate regulatory capital for lending to consumers, merchants, etc., and to incubate other financial services verticals such as insurance, payments, digital broking, asset management for at least the next three years of business operations. The regulatory licenses for the key businesses are in place, the company said.
JFS plans to launch consumer and merchant lending business based on proprietary data analytics to complement and supplement the traditional credit bureau-based underwriting. JFS will continue to evaluate organic growth, joint-venture partnerships as well as inorganic opportunities in insurance, asset management and digital broking segments.
“With secular growth drivers, the Indian financial services sector is poised to undergo a digital transformation. The sector presents a large, under penetrated and growing addressable market, especially for retail and small-business focused product categories. JFSL and its subsidiaries (JFS) will leverage the technology capability of Reliance and focus on digital delivery of financial products to democratize financial services access for 1.4 billion Indians," the statement said.
The financial services business’ current footprint touches more than 20 million consumers, RIL said.
Citi, Morgan Stanley and Goldman Sachs are acting as financial advisors and Khaitan & Co is acting as legal advisor in relation to the proposed transaction.
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