Jio Financial Services to list on the stock exchanges on 21-August-2023

The date of listing of Jio Financial Services is officially out. The financial / NBFC arm of Reliance Industries, which was demerged from RIL in the ratio of 1:1, will be listed on the NSE and the BSE on 21st August 2023. The NBFC arm of the Reliance group was housed under the banner of Reliance Strategic Investments Ltd, and the name of this company has been changed to Jio Financial Services Ltd post the demerger.

The stock of Jio Financial was permitted on the stock exchanges for just one day for price discovery and the price of the stock was discovered at ₹261.85, a substantial premium to the valuation of the financial business that experts had arrived at. It remains to be seen at what price the stock of Jio Financial trades when it lists on 21st August 2023.

Listing a day before exclusion from FTSE Russell

Interestingly, the listing of Jio Financial Services will happen exactly a day after the stock is dropped from the global benchmark, FTSE Russell. This decision was taken by the index provider as the stock had not yet started trading on the stock exchanges. Currently, there is no trading that happens on the stock of Jio Financial and what you get to see on the stock is just a dummy ticker at a price of ͭ₹261.85, the price discovered on the effective date of the demerger of Jio Financial Services from Reliance Industries.

To begin with, the stock would be listed in the T-group which is the trade-to-trade (T2T) group. In the trade to trade group, any trade (be it on the buy side or on the sell side) has to necessarily be for delivery only. There is no concept of intraday trading or intraday square off on T-group stocks. That is the segment in which Jio Financial Services will start trading on Monday, 21st August 2023. The stock will be in the T2T segment for a period of 10 trading days.

Read Jio Financial Services lists on NSE at ₹262 and on BSE at ₹265

Have shareholders got credit of Jio Financial shares?

According to information presented by the depositories and the registrar to Jio Financial Services, the allotted shares of Jio Financial Services in the ratio of 1:1 have already been credited to the respective eligible demat accounts in the previous week. The company, as per the approved scheme of demerger, had decided to allot 1 share of Jio Financial Services for every share of Reliance Industries held by them.

However, this allotment to the demat account only applies to those eligible shareholders of Reliance Industries whose names had appeared on the register of shareholders on the record date. For that, the shareholders should have purchased the shares at least one day prior to the record date for the demerger. Only then, they would be eligible for getting shares credited to their demat accounts. These shares have already been credited to the respective demat accounts.

What is the business model of Jio Financial Services

Jio Financial Services through its operating subsidiaries and joint ventures will offer broad range of financial services with customized solutions that would be targeted at the consumers and also at the merchants. Jio Financial is currently a strong player in the credit market, especially in merchant credit and also plans to foray into other segments. It has plans for insurance and capital market services. In addition, it also plans to float an AMC and put forth an array of passive investment products in association with the global leader in asset management, Blackrock.

It has already formed a 50:50 joint venture with Blackrock with a total initial investment of $300 million, with equal contributions from Jio Financial and Blackrock. The aim of the company is the play a catalytic role in transforming the landscape of digital finance in India. That means; Jio Financial will leverage the technological backbone of Reliance Digital with the merchant network of Reliance Retail to come with a unique solutions for customers. The solutions are expected to be simple, innovative, economical and digital-first.

Capital and holding structure of Jio Financial Services

To begin with, Jio Financial Services Ltd will have total outstanding shares to the tune of 635.33 crore shares. Out of this total outstanding shares, the promoter and the promoter group will hold 290.99 crore shares or 45.80% of the total paid up capital of Jio Financial Services. The balance 344.34 crore shares will be held by the public, representing 54.20% of the total paid up capital of Jio Financial Services Ltd.

Out of the public shareholdings of 344.34 crore shares, domestic financial institutions (including mutual funds) hold 103.74 crore shares while foreign portfolio investors (FPIs) hold 167.98 crore shares. Small shareholders (classified as retail shareholders) hold about 46.42 crore shares in Jio Financial Services Ltd.