In a surprising turn of events, the Jio Financial Services (JFSL) shares’ exclusion from the esteemed Sensex and other BSE indices has been postponed by an additional three days, now slated for August 31. This decision was made in light of JFSL shares plummeting, hitting the 5% lower circuit limits consecutively for two days.
Unprecedented Market Movement
Jio Financial Services, which recently made its debut on stock exchanges on August 21, following a demerger from its parent company Reliance Industries (RIL), has been witnessing a downward trajectory.
- The stock has consistently hit lower circuits since its listing, primarily driven by substantial selling from institutional investors.
- On August 25, JFSL shares hit the lower circuit for the fifth consecutive day, although they managed a recovery later in the trading session.
Implications for the Market
The stock’s removal from prominent S&P BSE indices, including the likes of Sensex, Sensex 50, BSE 100, and BSE 500, is now scheduled before the trading commencement on September 1. BSE Indices clarified in a circular, “Given the stock’s consistent lower circuit hits on August 24 and 25, 2023, the removal of JFSL from all S&P BSE Indices will be deferred by another three days.”
Furthermore, if JFSL doesn’t hit the lower circuit limit in the upcoming two days but does so on the third day, its removal from all S&P BSE Indices will face another delay.
Impact on Index Funds
With Jio Financial Services’ impending removal from all indices, index funds that acquired JFSL shares post-demerger will be compelled to offload these shares before its exclusion from the index.
- Market analysts project that approximately 12 crore JFSL shares will be sold by index funds as they recalibrate their portfolios.
As of the last update, JFSL shares were trading at an uplifted rate of ₹223.50, marking a 3.52% increase on the BSE.
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