Jio Financial to move out of trade-for-trade segment from September 4

economictimes.indiatimes.com:

Jio Financial Services (JFSL) will move out of the trade-for-trade segment and be part of the rolling segment, effective September 4, BSE and NSE said via separate circulars. Shares of the demerged entity of Reliance Industries (RIL) were officially listed on the exchanges on Monday at a slight premium to the derived price. On July 20, stock exchanges added Jio Financial to key indices, including the Sensex and Nifty 50, following the demerger of the financial services business Reliance Strategic Investments.

This was rechristened as Jio Financial Services. Through a special pre-open session in RIL stock, Jio Financial’s derived price was Rs 261.85, and it remained a part of key indices at this constant price since July 20. Last week, exchanges said that Jio Financial would trade in the “trade-for-trade” segment for the first ten trading days.

Therefore, it will be subject to upper and lower circuit limits of 5% even though it remains part of Nifty 50 and Sensex. This is unlike the other index stocks, which do not have circuit breakers as they are traded in the derivatives segment. After listing at a slight premium, JFSL shares reversed the trend and were locked in the 5% lower circuit at Rs 248.90.

This is due to likely selling by passive index funds. The stock will be removed from the indices on Thursday, provided it does not hit the price band for two consecutive days. In case during the first two of the three days, the stock hits the price band on both days, then the exclusion date will be deferred by another three days.