Jio Financial Services boasts implied market cap of ₹1.6 lakh crore; Is this high valuation justified?
Reliance Industries Ltd (RIL), has unsettled shadow lenders space in the country by claiming the second spot. Post demerging with RIL on Thursday, Jio Financial Services (JFSL) boasts off an implied market capitalisation of ₹1.6 lakh crore, that's way behind Bajaj Finance m-cap of ₹4.59 lakh crore, but significantly higher to its contemporaries in the space. Shares of Jio Financial will remain at ₹261.85 until it lists on the bourses. However, upon listing, Jio Financial Services will surpass Cholamandalam Investment and Finance which has an m-cap of over ₹95,000 crore, being the second largest NBFC presently.
“Jio financials is effectively valued at ₹261.85 per share. They have roughly 620 crore shares. That values Jio financials technically at ₹160,000 crore (roughly $20 billion)," said Deepak Shenoy, Founder, Capital Mind.
“But don't go overboard, Jio Fin shares haven't actually traded. What this means is that in the Nifty, Jio Financials will be valued at ₹160,000 cr. temporarily (until it eventually lists, when it will be removed).
Oh, this will be so crazy for all the index funds when they get new inflows," Shenoy wrote in a tweet. Also Read: RIL-Jio Financial demerger FAQ: Here is what shareholders need to know Ahead of the demerger, the billionaire Mukesh Ambani-led oil-to-telecom conglomerate, in a press release, gave a formula for determination of cost of acquisition of equity shares of the RIL and Reliance Strategic Investments Ltd (RSIL), which will be renamed as Jio Financial Services Ltd (JFSL). The cost of acquisition for Reliance Industries Ltd would be 95.32% while the rest 4.68% for Reliance Strategic Investments Limited, it said. JFSL’s value derived in a special pre-open session was much higher than
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