MUMBAI: Jio Financial Services, the demerged financial services unit of Reliance Industries, experienced an unexpectedly high share price of Rs 261.85 during a special trading session dedicated to its parent company's stock on Thursday.
On Thursday, Reliance's stock was being traded at Rs 2,580 per share, in contrast to its previous closing price of Rs 2,841.85 on Wednesday.
Market analysts had initially estimated the share price of the renamed entity, Reliance Strategic Investments, which will now be known as Jio Financial Services, to be valued between Rs 160 and Rs 190 per share.
Although JFS stock is set to be included in major indexes, including India's benchmark Nifty 50, it will remain inactive until its official listing.
The specific listing date is expected to be announced during Reliance's upcoming annual general meeting.
Shareholders of Reliance Industries will receive one share of Jio Financial Services for each share they hold in Reliance.
The demerger is viewed as a strategic move by the oil-to-retail conglomerate, Reliance, to enhance its presence in the financial services sector. This expansion will be facilitated by utilizing a non-bank financial company license held by the conglomerate.
Furthermore, Jio Financial Services (JFS) will benefit from access to substantial data from Reliance's telecom and retail businesses. Analysts believe that this data advantage will enable JFS to initiate lending activities. According to Macquarie Research, JFS is likely to achieve an AAA rating, allowing it to borrow at attractive interest rates.
According to analysts, Jio Financial Services has a lot of potential. It is well-positioned to capitalize on the growing demand for financial services in India. The company has a strong management team and a good track record.
Since the announcement of the record date for the demerger on July 8 (which was originally announced in October), shares of Reliance have surged by 8%.
(With inputs from agencies)
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