Reliance Industries spin-off from Jio Financial Services, first step towards monetization: analysts | Techno Glob

Reliance Industries Ltd (RIL) is to spin off its financial services arm and list it on Indian stock exchanges. In a statement, the company said Reliance shareholders will receive one share of Jio Financial Services Ltd (JFSL) for each share they hold in the company.

JFSL plans to launch consumer and merchant lending businesses while continuing to evaluate organic growth, joint venture partnerships as well as inorganic opportunities in the insurance, asset management and digital brokerage segments , did he declare.

“Reliance Industries (RIL) has announced the spin-off and listing of its financial services business, paving the way for the monetization of its verticals which we view as a positive trigger, unlocking value,” analysts said. brokerage and research firm Emkay.

The demerger will be done through a share exchange agreement. RIL shareholders will receive one JFSL share for each share they hold. RIL’s investment in Reliance Industrial Investments and Holdings Limited (RIIHL), part of RIL’s financial services business, will be transferred to JFSL.

“The Board of Directors of Reliance Industries Ltd (RIL), at its meeting held today (Friday), approved a plan of arrangement between RIL, Reliance Strategic Investments Limited (RSIL) and their respective shareholders and creditors in under which RIL will spin off its financial services business into RSIL (to be renamed Jio Financial Services Limited or JFSL),” the company announced on Friday.

RSIL is currently a wholly-owned subsidiary of RIL and a non-bank systemically important non-depository finance company registered with the RBI.

JFSL will acquire liquid assets to provide adequate regulatory capital for consumer and merchant lending, as well as to incubate other financial services verticals such as insurance, payments, digital brokerage and asset management for at least the next 3 years of business. The transaction is subject to customary statutory and regulatory approvals, including from NCLT, stock exchanges, SEBI and RBI.

According to ICICI Direct’s rating, RIL’s long-term outlook and dominant position in each of its product and service portfolios provide comfort for long-term value creation.

The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of Mint.

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