NEW DELHI — On August 21, shares of Jio Financial Services (JFSL), which recently demerged from parent Reliance Industries (RIL), will be offered on stock exchanges. Shares of the NBFC were credited to qualified RIL shareholders’ demat accounts last week in a 1:1 ratio, which implies that for every RIL share held as of the record date of July 20, owners received one share of JFSL.
According to the BSE, the scrip will be traded in the Trade-for-Trade category for ten trading days beginning from Monday under the symbol JIOFIN.
The stock’s pre-listing price was Rs 261.85 per share as part of a special price discovery session held on the record date, which was significantly more than the brokerage forecast of roughly Rs 190 and RIL’s cost of acquisition of Rs 133.
As a result, the NBFC’s market capitalization was Rs 1.66 lakh crore, or around $20.3 billion. At this valuation, it is now India’s second-largest NBFC and the 32nd most valuable firm, larger than titans such as Tata Steel, Coal India, HDFC Life, and SBI Life.
Bajaj Finance has a market capitalization of Rs 4.2 lakh billion. JFSL will overtake Cholamandalam Investment and Finance, the second largest NBFC with an m-cap of Rs 83,000 crore, once it is listed on stock exchanges.
JFSL will now be larger than Bajaj Holdings & Investment, SBI Cards, Shriram Finance, Muthoot Finance, and even the digital payments platform Paytm.
JFSL has been included in the Nifty50, BSE Sensex, and other indices, and its price will remain steady until the stock is listed separately. The stock will be delisted from all indices on the T+3 day, August 24.
Assuming a hypothetical price scenario for JFSL on August 24 of Rs 261.8 a share, Nuvama estimates that Nifty passive trackers could sell around 90 million shares, or approximately $290 million.
“Along with Sensex Index trackers, 55 million shares worth approximately $175 million could be sold.” “At the current free float, we’re assuming weightages of less than 1% in the Nifty50 and around 1% in the Sensex,” said Nuvama’s Abhilash Pagaria.
JFSL was removed from the FTSE All-World index and other worldwide indexes with effect from August 22nd, according to global index aggregator FTSE Russell, who claimed it was still awaiting the formal announcement, which came today.
On July 20, Jio Financial was included in numerous indices by the index aggregator, with a share issue of 6,765,591,509 and an investability weighting of 49.66%.
What exactly is JFSL?
JFSL, as a digital-first company, is interested in lending as well as other financial services sectors such as insurance, payments, digital broking, and asset management.
To complement and supplement traditional credit bureau-based underwriting, JFSL intends to develop a consumer and merchant lending company based on proprietary data analytics. It has previously established a 50:50 partnership with BlackRock in order to enter the mutual fund sector.
The Ambanis are likely to reveal not just the date of JFSL’s IPO but also the roadmap of future goals in the financial services industry at the company’s annual general meeting (AGM) on August 28.
“Jio Financial Services is a very well capitalized company.” It will now begin as one of the most significant participants in the field. It’ll give the other NBFCs a run for their money. The valuation is largely on its side. “This is an excellent time because credit growth is just beginning to pick up, consumer financing is very strong, and industry margins are still very healthy,” said Chakri Lokapriya of TCG AMC.
RIL shares rose more than 1% to Rs 2,532 following the announcement of the listing date.