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Reliance Demerger: RSIL priced at Rs 261.85 per share

Jul 20, 2023

By: BlinkX Research Team

Reliance Strategic Investments Ltd. (RSIL) shares were found for Rs 261.85, substantially more than the expert estimate of Rs 160–190. On July 20, RSIL will demerge from Reliance Industries Ltd (RIL), and later on, it would change its name to Jio Financial Services (JFS) and list on exchanges.

RSIL will thereafter be worth around Rs 1.45 trillion. From its previous closing of Rs. 2853 per share, the RIL stock closed at Rs. 2589 per share on the BSE.

On July 21, Reliance Industries will release its June quarter earnings.

With the transfer of RIL's finance operations to JFSL, that company will own a 6.1% interest in Reliance Industries.
According to the terms of the arrangement, RIL shareholders would get one share in Reliance Strategic Investments for each share they now own of the company.

The company primarily serves the credit market sector and NBFC industry. It has strategic goals to broaden its activities into the asset management, insurance, and digital payment sectors.

The National Stock Exchange (NSE) today conducted a special pre-open session (SPOS) from 9 am to 10 am for price discovery of RIL’s shares post-hive-off of JFSL. According to the index methodology, JFSL will be included in the Nifty 50, Nifty 100, and Nifty 200, among other indices.

Why did RIL demerger happened?

Because the development and expansion of the financial services industry would necessitate a differentiated strategy matched to its industry-specific risks, market dynamics, and growth trajectory, the Ambani family made the decision to spin-off JFSL into a separate corporation.

The nature and level of competition in the financial services industry are different from those in RIL's other sectors, such as the chemical, retail, and telecom industries.

Additionally, compared to RIL, the demerger will provide JFSL access to greater leverage for expansion. It is viewed as a value-unlocking process for shareholders.

Source: Media reports