Jio Financial Services (JFS), the financial arm demerged from Reliance Industries, is poised for a significant shift. On Thursday (August 31), the index confirmed that JFS will be removed from the BSE indices. This change is set to take effect before the start of trading on Friday, September 1, 2023.
Reason for Removal and Timeline
The removal of JFS from the S&P BSE Indices follows its listing on Monday, August 21, 2023. The demerger from its parent company, Reliance Industries, prompted this decision. Originally, JFS was scheduled for delisting on August 23, merely two days after its listing. However, the exchanges delayed the plan due to JFS remaining locked in the lower circuit.
Stock’s Performance and Impact on Sensex
In recent sessions, JFS has shown an upward trajectory. On August 31, the stock experienced its third consecutive session of gains and closed at an upper circuit of 5%, with each share reaching INR 242.50. Notably, Nuvama Alternative Research stated that JFS constitutes 1.1% of Sensex’s weight. This could potentially lead to passive selling of around 60 million shares, valued at approximately $180 million.
Nifty Indices and Exclusion Criteria
Nuvama explained that Jio Financial Services will not be excluded from Nifty indices until the newly formed entity avoids breaching price limits for two consecutive days, whether upward or downward. Nifty will only release a press statement confirming exclusion if these price band breaches are successfully avoided. Communication will remain minimal during this period.
JFS’s Diverse Portfolio and Ambani’s Vision
During Reliance Industries’ 46th Annual General Meeting (AGM) held on August 28, Chairman Mukesh Ambani outlined the diverse future of Jio Financial Services. Ambani mentioned that the company will offer products in payments, insurance, and asset management segments in India.
Ambani stated, “In payments, JFS will consolidate its payment infrastructure with a ubiquitous offering for both consumers and merchants, further driving digital adoption.” He emphasized that JFS’s products will not only compete with existing industry benchmarks but also incorporate innovative features like blockchain-based platforms and the central bank digital currency (CBDC).
JFS was established last year after Reliance Industries announced the demerger of its financial services business and the spin-off of Reliance Strategic Investments as Jio Financial Services. Ambani proudly highlighted that JFS became the world’s highest-capitalized financial services platform at inception, before the subsequent delisting announcement. The company’s core focus encompasses lending, insurance, payments, and investments.
