How the RIL-Jio Financial Services demerger will take place - explained
Reliance Industries (RIL) on Thursday (July 20). RIL on July 8 announced in a BSE filing that the National Company Law Tribunal approved the planned demerger of Jio Financial Services. It announced the record date of July 20, 2023, for the same.
While delivering its September quarter earnings last year, RIL announced the demerger of its financial services business and list it separately on the stock exchanges under Jio Financial Services Ltd. The Mumbai bench of the National Company Law Tribunal (NCLT) in its order on June 28 June (uploaded on the website of NCLT on July 5) approved the demerger. In May, shareholders and creditors approved the spinoff of Reliance Strategic Investments Ltd, which will be renamed Jio Financial Services.
The ratio for demerger is set at 1:1. This means for each share of RIL held before the record date on July 20, the company will award one share of JFSL. JFSL is expected to get listed in the next two-three months.
Experts pointed out that Jio Financial Services will hold 413 million treasury shares of RIL, accounting for approximately 6.1 per cent of RIL's total outstanding shares. This means JFSL will own a 6.1 per cent stake in RIL. When Jio Financial is separated from Reliance Industries, the share price of Reliance Industries will need to be adjusted.
The adjustment will depend on the value given to Jio Financial Services. BSE and NSE will conduct a special pre-open session on July 20 for RIL to discover its price after the demerger. The previous session's closing price of RIL will be the reference price for this session.
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