Reliance Industries (RIL) witnessed a remarkable surge in its share price, soaring over 4.5% and hitting a new 52-week high of Rs 2,755 on the BSE. This rally comes as the conglomerate sets July 20 as the record date for the demerger of its financial services arm, Reliance Strategic Investments, which will be renamed as Jio Financial Services (JFSL).
The decision to demerge was made during a recent board meeting after obtaining regulatory approval last month. On Saturday, July 8, RIL informed the exchanges about this significant development, resulting in the most active trading of RIL shares and triggering gains in the frontline indices, S&P BSE Sensex and Nifty50.
The demerger of Jio Financial Services is expected to unlock value for RIL's vast shareholder base, which amounts to 36 lakhs. As part of the plan, RIL shareholders will receive one share of Jio Financial for each share they own in RIL. This news has already contributed to a 13% increase in RIL's stock price over the past three months.
According to reports, except for the shares held by Reliance Retail Ventures, the remaining stock will be extinguished or cancelled at a price of Rs 1,362 per share based on an independent valuation by registered valuers. Reliance Retail Ventures holds approximately 99.91% of Reliance Retail, while the remaining 0.09% is held by other shareholders.
Following the announcement of the Jio Financial Services demerger, Reliance Industries Ltd's share price experienced a strong surge, breaking the previous 52-week high and surpassing a market capitalization of ₹18 lakh crore. At 10:43 AM, the market cap of Reliance Industries Ltd stood at around ₹18.62 lakh crore.
The record date for the Jio Financial Services demerger has been set for July 20, 2023. Reliance Industries confirmed that the effective date of the scheme is July 1, 2023. As per the scheme, Reliance Strategic Investments Limited (RSIL) will issue and allot one fully paid-up equity share of RSIL with a face value of ₹10 each for every fully paid-up equity share of ₹10 each of Reliance Industries to eligible shareholders.
While the official share price of Jio Financial Services is yet to be announced, global brokerages Jefferies and JP Morgan have estimated the share price to be around ₹179 and ₹189 per share, respectively.
As for the listing date of Jio Financial Services, industry experts anticipate it to take place by the end of August 2023, considering the timeline after the demerger record date.
Stay tuned for further updates on this exciting development, as RIL's strategic move continues to garner investor interest and reshape the financial landscape of the conglomerate.