Reliance Industries Limited (RIL) will demerge its financial services arm and list it on Indian stock exchanges. In a statement, the firm said that the shareholders of Reliance will be issued one equity share of Jio Financial Services Ltd (JFSL) for each share they hold in the company.
JFSL plans to launch consumer and merchant lending business while continuing to evaluate inorganic opportunities in the insurance, asset management and digital broking segments along with organic growth, joint venture partnerships.
,Reliance Industries (RIL) Analysts at brokerage and research firm Emkay announced the demerger and listing of its financial services business, setting the stage for the monetization of its verticals, which we see as a positive trigger, unlocking value.
The demerger will be done through share-swap arrangement, the shareholders of RIL will get one share of JFSL for every share held by them. RIL’s investment in Reliance Industrial Investments and Holdings Limited (RIIHL), a part of RIL’s financial services venture, will be transferred to JFSL.
“The Board of Directors of Reliance Industries Limited (RIL), in its meeting held today (Friday), approved a scheme of arrangement between RIL, Reliance Strategic Investments Limited (RSIL) and their respective shareholders and creditors, in accordance with which, RIL will separate its financial services undertaking into RSIL (name changed to Jio Financial Services Limited or JFSL),” the company said on Friday.
RSIL is presently a wholly owned subsidiary of RIL and is a non-deposit taking systemically important non-banking financial company registered with RBI.
JFSL will acquire liquid assets to provide sufficient regulatory capital for lending to consumers and merchants, as well as other financial services such as insurance, payments, digital broking and asset management for at least the next 3 years of business operations. will incubate. The transaction is subject to customary statutory and regulatory approvals including NCLT, stock exchanges, SEBI and RBI.
As ICICI Direct notes, RIL’s long-term prospects and dominant position in each of its product and services portfolio provide comfort for long-term value creation.
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