Jio Financial Services (JFS), the recently separated financial arm of Reliance Industries, is set to grace the stock market today. Last week, eligible shareholders were credited with JFS shares. The share price, discovered based on the record date, stood at a robust Rs 261.85. This figure surpassed Street’s expectations, which hovered around Rs 160-170 per share. The market is abuzz with anticipation regarding the stock’s performance upon listing.
Unlocking Value for RIL Shareholders
The demerger of this financial services division is poised to unveil significant value for RIL shareholders. As highlighted in RIL’s annual report, this move offers shareholders a golden chance to be part of a burgeoning growth platform.
Implications for Nifty and Sensex
Post its debut, JFS stock will bid adieu to both Nifty and Sensex by August 24, marking the third day post-listing.
- However, certain circumstances might push this exclusion date.
- Abhilash Pagaria of Nuvama Institutional Equities sheds light on potential passive outflows.
- If JFS’s share price remains at Rs 261.8 on its third trading day, Nifty index trackers might offload around 9 crore shares, translating to roughly $290 million.
- Concurrently, Sensex trackers could part with 5.5 crore shares, amounting to about $175 million.
Pagaria further elucidates, “If, during the initial two days, the spun-off entity reaches the price band, the exclusion date might be postponed by three days. Following two consecutive days without the spun-off entity touching the price band, it will be removed after the third trading day. If the entity hits the price band on this third day, no further deferrals will occur.”
Recalling the Demerger
The demerger’s record date was July 20. The discovered price of Rs 261.85 was deduced from the difference between RIL’s closing price of Rs 2,841.85 on July 19 and its ex-demerger price of Rs 2,580 during the pre-open session. JFS shares were credited to eligible RIL shareholders in a 1:1 ratio the previous week.
FTSE Indices and JFS
Jio Financial is slated for delisting from FTSE Indices on August 21, with its value marked at zero.
- In simpler terms, FTSE passive trackers will assign no value to JFS shares, gradually phasing them out post Jio’s trading commencement.
- Meanwhile, the MSCI Index will retain JFS shares.
The debut of JFS in the stock market is a testament to the evolving landscape of India’s financial sector. It’s intriguing to witness how major indices like Nifty and Sensex respond to such significant market events. The future trajectory of JFS will be keenly observed by investors and market analysts alike.
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