Shares of Jio Financial Services (ZFS), which was demerged from Reliance Industries last month, are all set to list on the stock exchanges on Monday, August 21. During the price discovery session on July 20, JFS shares were quoted at Rs 261.85 per share. The valuation of the company is 1.66 trillion rupees ($20 billion).
Some experts expect the stock to cross Rs 300 level further.
Zee said, “The stock may list at around Rs 300. If treasury stock owned by the company is removed, the value of Jio Financial as a percentage of its net worth is comparable to that of non-banking financial company (NBFC) peers. much less than.” Chokkalingam, Founder and Head of Research, Equinomics.
Between the price discovery session and Monday’s listing, ZFS has seen significant developments, including the launch of asset management ventures and reported plans for the insurance sector. Jio Financial has formed a joint venture with US-based asset manager BlackRock to enter the Indian asset management space.
However, ZFS shares are expected to face selling pressure from exchange-traded funds (ETFs) and index funds.
Jio Financial, which is currently a part of the Nifty 50 and Sensex, will be delisted from both the indices three days after its listing. According to Nuwama Alternative and Quantitative Research, the eviction will happen on August 24. Post exclusion, passive mutual fund schemes tracking Nifty 50 and Sensex would be required to sell their holding in the stock. According to Nuwama, Nifty 50 schemes currently hold about 90 million shares, while Sensex funds hold 55 million shares, taking their holding to about Rs 3,800 crore at current prices.
Last week, ZFS shares were credited to the demat accounts of eligible Reliance Industries Limited (RIL) shareholders. As a part of the demerger, RIL shareholders were allotted one share of Jio Financial for every share they held.
With the current valuation, Jio Financial will be India’s 33rd most valuable company and the third largest NBFC after Bajaj Finance and Bajaj Finserv. Of the banks, only five are currently valued higher than Jio Financial.
Jio Financial holds 6.1 per cent stake in RIL, which is currently valued at Rs 1.08 trillion. On Friday, RIL shares closed 0.51 per cent higher at Rs 2,551, taking the valuation of the country’s most valuable company to Rs 17.26 trillion.
Analysts believe the demerger is a strategic move by the oil-to-telecom conglomerate, as it could help the new company attract diverse investors, strategic partners and lenders with specific interests in the financial services business.
He believes the financial services spinoff is in line with Mukesh Ambani’s ambition to expand into non-oil sectors. Apart from telecom, the country’s largest conglomerate has grand plans in retail, e-commerce and now in the financial sector as well.
Investors allotted one share of ZFS for every share of RIL
The share price is currently Rs 261.85; Analysts expect gains on Monday
Nifty50, Sensex funds will sell 145 million shares, say analysts
The holding is worth around Rs 3,800 crore at current prices