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In a major development, Reliance Industries Limited (RIL) is all set to demerge its financial arm, Jio Financial Services, with the formal date set for July 20, 2023. The demerger was initially announced during the declaration of RIL's September quarter earnings, where it was revealed that shareholders of RIL will receive 1 share of the demerged entity, Reliance Strategic Investments, for each share held in the conglomerate.
The market's response to the news has been positive, with a notable rally in the share price of Reliance Industries. On July 10, 2023, the company achieved a milestone by becoming the highest-valued company in India, boasting a market capitalization of over 18.5 lakh crore.
A special pre-open session will be conducted for the price discovery of Reliance Industries following the demerger. The reference price for this session will be based on the closing price of Reliance Industries' shares on Wednesday.
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Post-demerger, the newly formed entity will be renamed Jio Financial Services and will be listed on the stock exchanges. Notably, Jio Financial Services will be temporarily included in Nifty 50 and 18 other indices of NSE, such as Nifty 100, Nifty 200, Nifty 500, Nifty Energy, and Nifty Oil & Gas, until it is officially listed on the stock exchanges, as per NSE Indices' release.
The demerger is expected to have significant benefits for both RIL and Jio Financial Services. By separating its financial services business, Jio Financial Services will have the opportunity to concentrate on its core operations and expand its market share. Additionally, the move is expected to unlock value for RIL shareholders.
The demerger of Jio Financial Services from Reliance Industries marks a crucial step in the company's growth strategy and holds great potential for future developments in the Indian financial market. Investors and industry experts are closely watching the unfolding of this significant event on Thursday morning.
— Harshita Kumar
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