What’s unique about special session for RIL shares?

• Follow

Reliance Industries has announced the demerger Jio Financial Services (JSFL) from itself and list the new demerged entity. To facilitate the price discovery of the RIL and the new entity, the stock exchanges are holding a special pre-openeing session on July 20 in RIL stock.

Till now when any company in Nifty got demerged, it would be removed out of the index. RIL indicated On May 2 that it may announce the demerger of Jio Financial Services Limited and fearing that RIL would be moved out of the index, everybody from the exchange to the regulator, got busy to retain RIL in the index. Reliance’s lenders and shareholders met in May to approve the demerger of JFSL and just about a week before this meeting, NSE announced a change in the rules. that allowed the remainder of the demerged company to remain in the index.

NSE feared the removal of RIL from the index could cause a major upheaval in the market. RIL has a 10% weightage in the index.

Not only this, JFSL will also get a direct entry into Sensex-Nifty, which will be historic in itself. Well RIL has created several landmarks earlier and the direct entry of Jio Financial into the indices will be another one as till date no company has got direct entry in the index. Apart from Sensex, this stock will also be included in 18 other indices of BSE.

RIL has fixed July 20 as the record date for the demerger of JFSL. The shareholders will receive one share of JFSL for every one in RIL.

The new company formed from the demerger of Nifty companies will be included in the index for at least 3 days. Although the name of the company will change for sure. In October 2022, RIL had announced the demerger of the financial services business and getting it listed separately and till date the financial services business of Reliance is in the name of Reliance Strategic Investmements Ltd.

After the demerger, the name of RSIL will be changed to Jio Financial Services Limited.

According to Motilal Oswal, the book value of JFSL is Rs 190. FSL will be the fifth largest financing company in the country by capital. JFSL will have a direct competition with Paytm and Bajaj Finance.  JP Morgan believes that JFSL’s stock can be listed at Rs 189.

Jefferies has given a target of Rs 179 for this and Centrum Broking has given a target of Rs 157-190 for JFSL .  According to Axis Securities, the valuation of JFSL is Rs 1,08,597 cr and according to the total 676.6 crore shares, the value of one share of JFSL will be Rs 160.