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Reliance Industries Demerger Announcement Sparks Interest in the Markets

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Following the announcement of the record date for the demerger of Jio Financial Services, investors rushed to buy shares of Reliance Industries (RIL), leading to a surge in the Nifty stock. The stock rallied up to 4.5% and reached a fresh 52-week high of Rs 2,755 on the Bombay Stock Exchange (BSE). Additionally, trading volumes on the BSE increased by 3.6 times.

What are the demerger terms for Reliance shareholders?

Under the demerger deal, all RIL shareholders as of the record date, which is set as 20th July 2023, will receive one share of Jio Financial Services (JFSL) for every RIL share they own. Investors have until July 19 to acquire RIL shares if they wish to participate in the demerger and be eligible to receive JFSL shares.

Stock Performance of Reliance Industries Ltd in the last 1 year:

Here’s what I have to say on the RIL demerger announcement:

Reliance has been known to disrupt industries with its discounted products which are catered to the masses. It did it with telecom in the past and is now doing it with retail. The financial services space seems to be its next target. JFS will be an NBFC (Non-banking finance company) initially, providing financial services such as loans, insurance, payments, digital broking & asset management. However, the NBFC space is getting increasingly difficult to operate in as RBI is tightening the rules so there will be no regulatory arbitrage left that differentiates banks and large NBFCs. Despite all the regulatory hurdles that can come, Reliance’s deep pockets and capacity to offer loans at a cheaper rate should provide tough competition to existing large players.

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Naveen K R

Senior Director, Windmill Capital | The content in this article is purely the author’s personal opinion and is for informational and educational purposes only. It should not be construed as professional financial advice and nor to be construed as an offer to buy /sell or the solicitation of an offer to buy / sell any security or financial products. The views and opinions stated in the content belong to the author. Windmill Capital Private Limited does not uphold nor promote any of the views / opinions. | Windmill Capital Private Limited is a SEBI registered research analyst (Regn. No. INH200007645)

Reliance Industries Demerger Announcement Sparks Interest in the Markets

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