Jio Financial Services shares will start trading on August 21st after separating from Reliance Industries. The synergy, between JFS and Reliances telecom and retail sectors gives JFS an advantage. The allocation of 6.35 billion equity shares demonstrates their decision while obtaining licenses in financial sectors strengthens their diverse portfolio.
An announcement made on Friday by the Bombay Stock Exchange reveals that the equity shares of Jio Financial Services are set to debut on the exchanges come August 21.
Notably, these shares will find themselves in the trade-for-trade segment for a span of 10 trading days. The Bombay Stock Exchange’s notice underlines that this particular security will play a role in a distinctive pre-open session designated for IPOs and other categories of scrips, aligning with the SEBI circular.
In an earlier development, the demerger of Jio Financial Services from its parent company Reliance Industries took place in June. The intricacies of this arrangement result in the issuance and allocation of one paid-up equity share, valued at ₹10 each, of Jio Financial Services for every corresponding fully paid-up equity share of Reliance Industries.
The notice further discloses that a substantial 635 crore equity shares, each worth ₹10, were allotted pursuant to the scheme of arrangement. This allocation was completed and finalized last week, with the shares duly credited to the demat accounts of RIL shareholders, as reported by various media outlets.
The strategic advantage of Jio Financial Services lies in its symbiotic relationship with its parent, Reliance Industries. The latter’s presence in both the telecommunications and retail sectors furnishes JFS with a distinct edge over its competitors. Capitalizing on this synergy, JFS enjoys the perks of lower funding costs, facilitated by the robust credit rating and the ownership of a significant 6.1% stake in RIL’s assets.
Experts posit that given the substantial customer base of 20 million and established vendor partnerships, JFS’s initial ventures could likely revolve around consumer lending, particularly in the realm of electronics, and merchant financing. A comprehensive report from a prominent brokerage firm elaborates on this potential trajectory.
JFS boasts licenses spanning broking, asset management, NBFC, insurance, and mutual funds enterprises. A comprehensive report by Bernstein illustrates that the consolidated gross revenue for financial services in the fiscal year 2023 stood at ₹890 crore, marking a year-on-year decline of 57.8%. Notably, the EBITDA margins for the same fiscal year settled at a commendable 56.8%, as stated by Bernstein’s report.
JFS’s pursuit of excellence is further evidenced by its strategic appointments. Hitesh Sethia, previously at the helm of Europe for McLaren Strategic Ventures, now serves as JFS’s CEO and MD. Additionally, the esteemed KV Kamath, formerly the head of ICICI, has assumed the role of non-executive chairman for the company.
