Jio Financial demerger | RIL shareholders to meet on May 2 – shares top gainer on Nifty 50

Secured creditors, unsecured creditors and shareholders of Reliance Industries will meet on May 2 to approve the proposed demerger of Reliance Strategic Ventures. Post the approval, the unit, which is the financial services subsidiary of the oil-to-telecom conglomerate, will be renamed Jio Financial Services.

Shareholders of Reliance Industries will receive one share of the demerged entity for every one share held in the company.

Reliance Industries approved the demerger of the financial services arm in October 2022. Veteran Banker KV Kamath will be the non-executive chairman of the demerged entity.

Jio Financial Services will acquire liquid assets (including treasury shares) of Reliance Industries’ financial services arm to bring adequate regulatory capital for lending to consumers and merchants, and to incubate other financial services verticals, including insurance, payments, e-broking and asset management over the next three years.

Following the demerger, shares of Jio Financial Services will be listed on both BSE and NSE with its share capital rising to Rs 15,005 crore from Rs 232.1 crore, while the paid-up share capital will go up to Rs 6,766 crore from Rs 2.33 crore.

The structure of Jio Financial will allow it to partner with strategic or financial investors, enhancing strategic focus and supporting its growth drivers.

Reliance's financial services business reported combined revenue of Rs 1,535.6 crore in financial year 2022 and had a combined asset base of Rs 27,964 crore.

According to brokerage firm Macquarie, Jio Financial Services will be valued at more than Rs 1.52 lakh crore and become the fifth largest financial services firm in India.

Shares of Reliance Industries made a 52-week low last week of Rs 2,180 and have recovered swiftly from those levels. The stock is currently trading 3.2 percent higher at Rs 2,309.65 and are the top gainers on the Nifty 50 index. The stock is also contributing 55 points to the Nifty 50 upside.