Why NSE is holding special pre-open session for Reliance Industries Ltd

NEW DELHI: The National Stock Exchange (NSE) has scheduled a special pre-open session on July 20 for Reliance Industries Ltd due to the demerger of its financial services business, Reliance Strategic Investments Ltd. As part of this demerger, the spun-off entity, Reliance Strategic Investments Ltd (RSIL), will undergo a name change and be renamed as Jio Financial Services (JFSL).
The objective of this session is to determine the price discovery for Reliance Industries’ shares. The difference between the share price derived during this session and the closing price of Reliance Industries on July 19 (the day prior to the ex-demerger date) will establish the ‘constant price’ at which Jio Financial will be included.
Reliance Industries will remain a constituent of the Nifty Indices even after the demerger.
Furthermore, the spun-off entity, Jio Financial Services, will be added to various Nifty indices, including Nifty 50, Nifty 100, Nifty 200, and Nifty 500, effective from July 20, as stated by NSE Indices in a Monday statement.
As a result of this demerger, there will be a total of 51 stocks available for trading on the Nifty 50 for at least three days starting from July 20, as the demerged entity becomes part of the index.
Here are some FAQs on RIL demerger:
What is the demerger ratio?
The demerger ratio is 1:1. This means that for every share of Reliance Industries that you own, you will receive one share of Jio Financial Services.
How do I get my shares of Jio Financial Services?
If you are a shareholder of Reliance Industries as of the record date of July 20, 2023, you will automatically receive your shares of Jio Financial Services. You do not need to do anything.
What will happen to the share price of Reliance Industries?
It is difficult to say what will happen to the share price of Reliance Industries after the demerger. Some analysts believe that the share price could decline as investors sell their shares of Reliance Industries to get shares of Jio Financial Services. Others believe that the share price could remain stable or even increase as investors see the potential of Jio Financial Services.
What is the future of Jio Financial Services?
Jio Financial Services is a new company with 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. I believe that Jio Financial Services has the potential to be a successful company.
Will Jio Financial Services be listed on the stock exchange?
Yes, Jio Financial Services is expected to be listed on the stock exchange in the next few months.
What’s expected value of Jio Financial Services
According to estimates by five analysts, Jio Financial Services is likely to be valued between Rs 160-190 per share.
Axis Securities, on Monday, recommended buying Reliance as “a more economical way” to buy JFS, which it pegs at 160 rupees ($1.95) per share.
Nuvama Institutional Equities values JFS at 168 rupees per share, Jefferies at 179 rupees, JPMorgan at 189 rupees and Motilal Oswal at 190 rupees ($2.32).
Overall, JFS could be India’s fifth-largest financial services company in terms of net worth, Macquarie estimates.
What kind of financial services will Jio Financial Services offer?
Jio Financial Services will offer a wide range of financial services, including credit cards, loans, insurance, and wealth management.
Who is the target market for Jio Financial Services?
Jio Financial Services is targeting the mass market in India. It is looking to provide financial services to people who have traditionally been underserved by the financial sector.