Bonus share for Nifty 50/Sensex with JFSL entry; will passive investors be impacted?
Reliance Industries (RIL) gave benchmark index Nifty 50 a bonus stock, Jio Financial Services, making it the 51st candidate in the pack. Stock exchanges conducted a special pre-open session in shares of RIL between 9 AM and 9:45 AM to derive the price of Jio Financial.
The price of Jio Financial was calculated based on the difference between Wednesday’s close price of RIL and the price discovered in the special pre-open session. Stock exchanges conducted a special pre-open session in shares of RIL between 9 AM and 9:45 AM to derive the price of Jio Financial.
The price of Jio Financial was calculated based on the difference between Wednesday’s close price of RIL and the price discovered in the special pre-open session. Much to the surprise of Dalal Street investors, the derived price of Jio Financial came to be Rs 261.85 per share, much higher than brokerage estimates of up to Rs 190.51st Candidate Forever? The primary purpose of adding Jio Financial to a series of indices, including Nifty 50, was to ensure price stability and limited volatility in RIL shares on account of the demerger exercise.
Jio Financial will remain in the Nifty 50 and other indices at a constant price of Rs 261.85 only until it officially gets listed on the exchanges. After the stock gets listed, exchanges will allow prices to stabilise in both stocks – RIL and Jio Financial – for three days.
On the third day from listing, Jio Financial will be removed from all the indices. The stock will be eligible to be part of any of the NSE/BSE indices only if it meets the criteria set by the exchanges for inclusion in those indices.Passive Investor Action As explained above, the idea behind introducing Jio Financial into key indices is to help passive as well
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