Jio Financial Services

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Jio Financial Services
Jio Finance
Company typePublic
ISININE758E01017
FounderMukesh Ambani
HeadquartersMumbai, Maharashtra
Area served
India
Key people
K. V. Kamath, Rajiv Mehrishi
Websitewww.jfs.in

Jio Financial Services is an Indian financial services company that was originally a subsidiary of Reliance Industries (RIL). It became an independent entity and was listed on the Indian stock exchanges in August 2023.[1] The company provides financial services, including payment services and insurance broking.[2][3]

Its subsidiary Jio Finance holds an NBFC license from the RBI. Another subsidiary, Jio Payments Bank, is also a payments bank registered in India.

History

Jio Financial Services was initially part of Reliance Industries' financial services businesses. It separated in a demerger to form a new firm, following which it was listed on the stock exchanges.[1] Reliance Industries transferred Rs 15,500 crore of cash and liquid investments to Jio Financial Services as part of the demerger scheme. This gave Jio Financial Services a liquid asset base of Rs 20,700 crore.[4] Investors in Reliance also received 1 equity share of Jio Financial Services for every share they held in Reliance Industries.[5]

The company was listed on the stock exchanges on August 21, 2023. However, it was removed from BSE and FTSE indices in September 2023.[6]

Multiple index funds that tracked the NIFTY 50 and the BSE SENSEX, had large quantities of Reliance Industries in their portfolio. They received a share of JFSL for every share of Reliance they held. These shares found a temporary home in these indices, but it was going to be removed since it did not meet any of the criteria. The index funds tracking these indices were forced to sell JFSL shares worth roughly around ₹2,700 crore before the stock was removed from the indices.[7] This led to the stock hitting it's lower circuit for multiple days in a row, as index funds dumped the stock in anticipation of it being dropped from the index.[8]

JFSL shares were to be excluded from Nifty and Senex on August 23, but with the heavy beating and the stock hitting lower circuit limits consistently, the exclusion has been extended to August 28.

The company also entered the asset management company (AMC) business in partnership with BlackRock, by forming Jio BlackRock, a 50:50 joint venture.[9]

As of the end of the June quarter, the company had a liquid asset base of Rs 20,700 crore.[4]

References

  1. ^ a b Gohel, Ankit (August 18, 2023). "Jio Financial Services to be listed on stock exchanges on August 21". mint.
  2. ^ "Banking & Financials: Jio Financial Services: Decoding the unknown". indiainfoline.com.
  3. ^ "Jio Financial Services to provide simple, affordable solutions: Mukesh Ambani". Business Today. August 6, 2023.
  4. ^ a b "Reliance Industries shifts Rs 15,500 crore to Jio Financial Services". July 24, 2023.
  5. ^ Jauhari, Ujjval (2023-07-20). "Reliance demerger: Jio Financial Services valued at ₹261.85". mint. Archived from the original on 2023-08-23. Retrieved 2024-02-16.
  6. ^ "Jio Financial Services to be removed from BSE Indices from September 1". Moneycontrol. August 31, 2023. Archived from the original on 2024-02-16. Retrieved 2024-02-17.
  7. ^ Livemint (2023-08-24). "Why Jio Financial Services shares are hitting lower circuit everyday - Explained". mint. Archived from the original on 2023-08-26. Retrieved 2024-02-16.
  8. ^ "The index fund attack on Jio Financial Services is over. Almost". Finshots. 2023-09-04. Archived from the original on 2023-10-02. Retrieved 2024-02-16.
  9. ^ Narayanan, KS Badri (August 4, 2023). "Interesting times ahead for AMC business with the entry of Jio BlackRock". BusinessLine.
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