Reliance demerger: Jio Financial Surpasses Estimates at ₹261.85
New Delhi: Jio Financial Services, following its successful demerger from Reliance Industries Ltd. (RIL), made a significant impact on the National Stock Exchange with its shares valued at ₹261.85 per share. The valuation was determined during a special pre-open call auction session in the capital market segment on Thursday. In contrast, RIL’s share price fell to ₹2,580.
The price discovery of Jio Financial Services came as a pleasant surprise, surpassing analysts’ expectations, who had previously estimated its value to be in the range of ₹125-225 per share. These projections were primarily based on Jio Financial Services’ ownership of approximately 6% of treasury stake in Reliance Industries.
JP Morgan analysts had initially implied a value of ₹189 per share for Jio Financial Services, solely considering the treasury shares of RIL. On the other hand, Nuvama Equity Research valued the treasury shares at ₹168 apiece (6% of market price) based on RIL’s closing price on 14 July. Despite the demerger, they opined that RIL’s stock might be least affected and could potentially see an upside of 3-5%.
Considering the closing price of Reliance Industries shares at ₹2,580 during the pre-opening session and the previous closing price of ₹2,841.85 on Wednesday, Jio Financial Services is set to be included in various indices, including Nifty, at ₹261.85 per share. This value will remain constant until the official listing date of Jio Financial Services is announced.
Industry analysts eagerly await more detailed information and clarity on valuations, hoping for a more granular roadmap to be presented during RIL’s Annual General Meeting (AGM) concerning the strategy for Jio Financial Services.
As part of the demerger plan, Reliance Industries’ shareholders are entitled to receive Jio Financial Services shares at a ratio of 1:1 or 1 equity share of Jio Financial Services for every share held in RIL on the record date.
Earlier this month, the National Company Law Tribunal had granted approval for the proposed demerger, signaling a pivotal development for the Mukesh Ambani-led conglomerate.
About Reliance Industries:
Headquartered in Mumbai, Reliance Industries is a multinational conglomerate with a diverse range of businesses, such as energy, petrochemicals, natural gas, retail, telecommunications, mass media, and textiles, among others.
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