Jio Financial Services demerger: RIL share price may see a 3-5% upside, say experts
Reliance Industries' (RIL) financial services arm has the potential to generate a positive impact on the stock. Brokerage firms believe the demerger has the potential of unlocking significant value for the company and its shareholders. It could give a boost to the stock price by 3-5 per cent.
Shares of Reliance Industries rose over a per cent to hit their fresh 52-week high of ₹2,825.95 on BSE in morning trade on Tuesday (July 18). Reliance Industries 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.
RIL said that the demerger of its financial service undertakings into RSIL (Reliance Strategic Investments Limited) would be renamed JFSL (Jio Financial Services Limited). The investment of RIL in Reliance Industrial Investments and Holdings Limited (RIIHL), which is part of the financial services undertaking of RIL, will stand transferred to JFSL. Read more: NCLT approves RIL’s financial demerger Many experts believe that the demerger could generate value for the company and it may be an opportunity for shareholders to bet on the stock.
Brokerage firm Nuvama Wealth Management believes the de-merger of RIL's financial services is value unlocking, similar to what happened back in 2005 when RIL demerged four entities. The brokerage firm has a buy call on RIL stock with a target price of ₹3,205. "We demonstrate that back in 2005 when RIL demerged four entities, the market actually rewarded RIL.
After the split, shareholder wealth swelled 38 per cent. Should the market have a déjà vu moment this time too, shareholders’ wealth could potentially increase by 3–5 per cent," Nuvama said. "We
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