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PremiumReliance Industries Ltd. (RIL) share price ex-JFSL has been discovered at ₹2,580 per share, while Jio Financial Services is valued at ₹261.85 per share after the special pre-opening session. The billionaire Mukesh Ambani-led oil-to-telecom conglomerate demerged its financial arm Jio Financial Services (JSFL) today. The ratio for demerger is set at 1:1.
Reliance Industries Ltd (RIL) share price ex-Jio Financial Services, ended at ₹2,623.00 apiece on the BSE, higher by 1.67% that its discovered price of ₹2,580.00.
On the BSE, RIL share price closed 1.19% higher at ₹2,619.80 apiece.
The market discovered price of ₹261.85 per share of Jio Financial Services has come much higher than most brokerages’ estimates. This high price is a reflection of the market’s assessment of Jio Financials’ potential. The wide reach of JFSL through RIL’s other business segments like Reliance Retail has the potential to grow the company at a fast pace for many years to come. The market is discounting this potential, said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Reliance Industries Ltd (RIL) share price after demerger with Jio Financial Services is valued at ₹2,700 per share, according to Deven Choksey, MD, KRChoksey Holdings.
According to the Sum of The Part (SoTP) based valuation of Reliance Industries, post demerger of Jio Financial Services at ₹261.45 per share, Choksey values RIL shares at ₹2,700 apiece.
He values Reliance Retail at ₹1,250, Jio Platforms at ₹600, Renewables business at ₹300 and O2C business at ₹550.
He believes RIL and Jio Financial Services price discovery process was fairy balanced. Jio Financial Services’ networth is ₹1.40 lakh crore which is higher than Axis Bank, Kotak Mahindra Bank and Bajaj Finance, he said in a note.
MSCI Standard Index will maintain demerged entity Jio Financial Services in the Index, said Abhilash Pagaria, Head, Nuvama Alternative and Quantitative.
The Official circular reads – “Based on the estimated post-event company full and float adjusted market capitalizations, JIO FINANCIAL SERVICES satisfies the criteria to be added to the Large Cap segment of MSCI Global Standard Indexes."
FTSE said, “As per the current methodology , the stock (JFSL) will get excluded if it doesn’t list within 20 working days post Record Date of demerger."
Jio Financial Services will be maintained in all the NSE and BSE Indices at a constant price of 261.8 per share which is derived on Thursday, July 20. However, the stock will be dropped from all the NSE and BSE indices at the last traded price which is effective at the open of JFSL listing date + 3 business days.
For Instance: If, supposedly, JFSL lists on August 21, 2023 then stock will compulsorily be deleted on August 24, 2023, explained Abhilash Pagaria, Head, Nuvama Alternative and Quantitative.
Read all FAQs on RIL-Jio Financial demerger here
After the demerger of Jio Financial Services from Reliance Industries could give give birth to a financial behemoth and pose tough competition to existing non-banking financial comapnies (NBFC) like Bajaj Finance, experts said. Read full report here
Assuming the hypothetical price scenario for Jio Financial Services Ltd (JFSL) on its Trading (T) + third day of listing - at ₹261.8 per share – Nifty 50 Index passive trackers could sell around 90 million shares which is equivalent to appx $290 million, said Abhilash Pagaria, Head, Nuvama Alternative and Quantitative research
Alongside, Sensex Index trackers could sell 55 million shares which is equivalent to appx $175 million. At the current free float - assuming weightages of less than 1% in Nifty 50 and around 1% in Sensex, he added.
The above calculation is assuming prices of other member constituents remain the same (closing of July 19 , 2023)
After a stronger than expected looking debut of Jio Financial Services shares, stock market experts are highly bullish on this new Reliance entity on Dalal Street. They believe that JFSL would be a pure financial company that will be in lending, investing and other financial business'. Appointment of two banking pioneers KV Kamath and Hitesh Sethi is a glaring example of it. Read full report here
“Jio financials is effectively valued at ₹261.85 per share. They have roughly 620 crore shares. That values Jio financials technically at ₹160,000 crore (roughly $20 billion)," said Deepak Shenoy, Founder, Capital Mind.
“But don’t go overboard, Jio Financial Services shares haven’t actually traded. What this means is that in the Nifty, Jio Financials will be valued at ₹160,000 crore. temporarily (until it eventually lists, when it will be removed). Oh, this will be so crazy for all the index funds when they get new inflows," Shenoy said in a tweet.
Reliance Industries Ltd (RIL) share price gained more than one percent after the demerger of its financial arm Jio Financial Services Ltd (JFSL). RIL share price was trading higher by 1.20% at ₹2,623.10 apiece on the BSE. RIL stock was up 1.67% at ₹2,620.00 apiece on the NSE.
RIL share price ex-JFSL was discovered at ₹2,580 per share, while Jio Financial Services is valued at ₹261.85 per share after the special pre-opening session.
Jio Financial Services was valued at ₹261.85 per share on the National Stock Exchange at the end of a special pre-open call auction session conducted in the capital market segment for price discovery on Thursday.
The discovered price of Jio Financial Services is above analyst expectations who had valued it at ₹125-225. Analysts' valuations were based on around 6% treasury stake in Reliance Industries, that Jio Financial Services would own. Read more here
Reliance Industries - JIO financial Services Demerger: Reliance Industries share price opened at ₹2,580 per share ex-Jio Financial Services (JFSL) after the special pre-open call auction session on stock exchanges. Read here
Reliance-JFSL demerger: The Jio Financial Services share price has listed on the National Stock Exchange (NSE) at ₹273 per share. This calculation came after Reliance share price settling on NSE at ₹2,580 per share in special pre-open session on Thursday as the RIL stock had ended at ₹2,853 apiece on NSE. On BSE, Reliance share price settled down at ₹2,589 per share in special pre-opening session. Read here
Reliance Industries share price ex-JFSL discovered at ₹2,580 per share, while Jio Financial Services is valued at ₹261.85 per share.
Reliance Industries share price ex-Jio Financial Services (JFSL) trades at ₹2,575 in pre-open session
“This is a strong listing of Jio Financial Services Ltd (JFSL) shares because as per Reliance Industries' (RIL) last closing price of ₹2,853 on NSE, the implied value of the ex-demerged entity is ₹2,707 and that of Reliance Strategic Investments Ltd (RSIL) is ₹133," said Sumeet Bagadia, Executive Director at Choice Broking.
Ahead of Reliance Industries Ltd (RIL) and Reliance Strategic Investments Limited demerger, The RIL board has declared cost of acquisition of Reliance and Jio Financial Services Ltd. As per the latest exchange filing of the Reliance Industries has informed Indian stock market exchanges that after demerger, cost of acquisition for Reliance Industries Ltd would be 95.32 per cent while the rest 4.68 per cent for Reliance Strategic Investments Limited. Read here
Reliance Industries started trading in a special session aimed at determining the share value of Jio Financial Services, its demerged financial services unit. Reliance's stock had closed at ₹2,841.85 on Wednesday.
The two main stock exchanges, NSE and BSE, are holding a "pre-open call auction" session for Reliance between 9:00 a.m. to 10.00 a.m.
A share price for Reliance Strategic Investments, which will be renamed Jio Financial Services, will be determined by calculating the difference between Reliance's last close and the stock's settling price at the end of the special session.
The change in Reliance Industries’ pre-open price will not have an impact on Nifty pre-opening value right now. The Nifty index is pricing in Reliance Industries at Wednesday’s closing price of ₹2,853 per share.
Special pre-open session by NSE and BSE for price discovery begins.
Jio Financial Services will begin trading as part of the NSE Nifty50 today. Reliance Industries (RIL) has demerged its financial services arm - Reliance Strategic Investments, which is being renamed and listed as Jio Financial Services. The demerged entity will also be included in the Nifty 100, Nifty 200, and Nifty 500 indices, as well as other sectoral indices, the National Stock Exchange said on July 17. Check full list here
The post demerger cost of acquisition of Reliance Industries Ltd (RIL) share is at 95.32% and that for Reliance Strategic Investments Ltd (RSIL) share is at 4.68%.
The implied value of RIL share is at ₹2,707 per share at last closing price, while that for RSIL, which will be renamed as Jio Financial Services Ltd, is at ₹133 per share.
Reliance Industries Ltd (RIL) will consider paying a dividend to its investors, along with its financial results for the April-June quarter of current fiscal (Q1FY24) on Friday. "We wish to inform you that at the Board meeting scheduled on July 21, it is proposed to recommend a dividend on equity shares of the company for the financial year ended March 2023," said Reliance Industries in a regulatory filing to the stock exchanges. Read here
Isha Ambani has been appointed the non-executive director on the board of Jio Financial Services (JFSL), whereas Hitesh Sethia, former ICICI executive, will be the new CEO, MD.
Veteran banker KV Kamath will be the non-executive chairman.
The shareholders who own Reliance stock today will receive one equity share of Jio Financial Services for every one share held of RIL.
The stock exchanges will be holding a special pre-opening trading session for RIL today between 9 am and 10 am and the RIL shares will start trading at 10 am. This session will help determine the adjusted share price of RIL after the demerger of Jio Financial Services. Read here
Here’s how the price discovery will work with an example.
a) During the special session on Thursday, RIL trades at ₹2,600.
b) And the closing price of RIL on Wednesday was ₹2,800.
c) After the demerger, the spun-off business JFS (Jio Financial Services) will have a separate listing and its stock price will be set at ₹200 (2,800-2600)
Jio Financial will be added in the indices, including Nifty 50, at a price of ₹200 per share. It will remain in the indices at this constant price of ₹200 until Jio Financial is officially listed as a separate entity. As a result, temporarily, Nifty 50 will have 51 stocks, explains Pravesh Gour, Senior Technical Analyst, Swastika Investmart.
NSE and BSE will hold a special “price discovery" session for the first time ever to determine the value of Jio Financial Services' shares.
Analysts estimate that Reliance Jio Financial Services will be valued at ₹160-190 per share.
We demonstrate that back in 2005 when RIL demerged four entities, the market actually rewarded RIL. After the split, shareholder wealth swelled 38%. Should the market have a déjà vu moment this time too, shareholders’ wealth could potentially increase by 3–5%, Nuvama said.
“We estimate a value of ₹168 (5 per cent of SoTP), currently embedded in non-operating assets. We ascribe a value of ₹323 to nonoperating assets. We value treasury shares at ₹168 (6 per cent of the current market price) based on RIL’s closing price on 14 July 2023. We argue that RIL stock could be least impacted by this demerger and instead see an upside of 3-5 per cent," said Nuvama.
The stock price has been taken after considering all the stock splits and adjustments made. Each of these subsidiaries issued its shares to shareholders of RIL in the ratio of 1:1. After the split, there was an increase of 38% in shareholder wealth as RIL shares did not fall post-split, in addition to which investors got the additional entities, effectively for free, said Nuvama.
The demerger of Reliance Industries' (RIL) financial services arm has the potential to generate a positive impact on the stock. Brokerage firms believe the demerger has the potential of unlocking significant value for the company and its shareholders. It could give a boost to the stock price by 3-5%. Read full report here
Brokerage firms believe the demerger has the potential of unlocking significant value for Reliance Industries Ltd (RIL) and its shareholders. It could give a boost to the stock price by 3-5%.
Brokerage firm Nuvama Wealth Management believes the de-merger of RIL's financial services is value unlocking, similar to what happened back in 2005 when RIL demerged four entities. The brokerage firm has a buy call on RIL stock with a target price of ₹3,205.
Brokerage firm Axis Securities, too, recommended investors buy Reliance Industries shares before the record date of July 20, 2023, as the brokerage firm believes it to be a more economical way to buy Jio Financial Services which is likely to list at ₹160 (one-time RIL’s treasury stock value).
Rajesh Sinha, Sr. Research Analyst at Bonanza Portfolio pointed out that Jio Financial Services (JFSL) owns 6.1% in Reliance Industries (RIL), which is valued at ₹1.1 lakh crore.
“This would represent a substantial portion (nearly 90%) of JFSL’s net worth. Excluding investments in RIL shares, JFS’ net worth would be around ₹10,000 crore. As per street estimates, JFSL will list at a price of ₹150-190 per equity share," said Sinha.
After the demerger, Jio Financial will be temporarily added to Nifty50 along with 18 other indices of NSE, including Nifty 100, Nifty 200, Nifty 500, Nifty Energy, and Nifty Oil & Gas without replacing any stocks. This inclusion is due to the change in the index methodology regulations laid out by the exchange when considering mergers and demergers in index constituents.
Jio Financial will also be added to 18 of the S&P BSE indices also, including the S&P BSE Sensex, starting July 20 for a period of three days. After three days, it will be dropped from all the indices at the last traded price.
Shares of Reliance Industries (RIL) will not be available for normal trading for the first 45 minutes on Thursday, July 20 as a result of the demerger of its financial services arm. RIL shares will go through a special pre-open call auction tomorrow on the demerger of Jio Financial Services Ltd (JFSL) between 9:00 am to 10:00 am. During this session, one can only place, cancel, or modify the orders.
The price at which the highest orders will be matched becomes the opening price of the stock at 10 am when normal trading resumes for RIL. The difference between Wednesday’s closing price of RIL and the price derived during the special session will be treated as the "constant price" for Jio Financial Services. On Wednesday, shares of RIL settled 1.15% higher at ₹2,853 apiece on the NSE. Read more here
BSE and NSE will conduct a special pre-open session today for Reliance Industries to discover its price after the demerger. The previous session’s closing price of RIL, which is ₹2,853.00 on NSE will be the reference price for this session.
The ratio for demerger of Jio Financial Services from Reliance Industries (RIL) is set at 1:1. This means for each share of RIL held before the record date on July 20, the company will award one share of JFSL. JFSL is expected to get listed in the next two-three months.
Experts pointed out that Jio Financial Services will hold 413 million treasury shares of RIL, accounting for approximately 6.1% of RIL's total outstanding shares. This means JFSL will own a 6.1% stake in RIL.
The record date for the Reliance-Jio Financial demerger is today, July 20, 2023.
Jio Financial Services (JSFL) is going to be demerged from Reliance Industries (RIL) on Thursday (July 20). RIL on July 8 announced in a BSE filing that the National Company Law Tribunal approved the planned demerger of Jio Financial Services. It announced the record date of July 20, 2023, for the same.
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