RIL-Jio Financial demerger could give tough competition to existing NBFC players like Bajaj Finance, say experts
Reliance Industries (RIL) will create a non-banking financial behemoth with a size of approximately ₹1.5 lakh crore which could pose a tough challenge to existing non-banking financial companies (NBFCs), according to experts. The financial arm of Reliance Industries was demerged from its parent company Reliance Industries today. The demerged entity RSIL (Reliance Strategic Investments Limited), would be renamed JFSL (Jio Financial Services Limited) and it will be listed separately on NSE and BSE in the next few months.
Jio Financial Services (was valued at ₹261.85 per share on the NSE at the end of a special pre-open call auction session conducted in the capital market segment for price discovery on Thursday. The discovered price of Jio Financial Services is above analyst expectations who had valued it at ₹125-225. Analysts' valuations were based on around 6% treasury stake in Reliance Industries, which Jio Financial Services would own.
Read more: RIL-Jio financial demerger FAQ: Here is what shareholders need to know Read more: Jio Financial demerger: All you need to know about RIL shares, price discovery, why the special session, etc. The demerger of JFSL from RIL will give birth to a financial behemoth in the country, experts say, thanks to its 6.1 per cent holding in Reliance treasury shares. "JFSL by virtue of its 6.1 per cent holding in Reliance treasury shares and its other assets will start with a net worth of almost ₹1.5 lakh crore.
Generally, NBFCs lever up to 6-8 times their book value. Bajaj Finance with 44,000 crore of net worth has an AUM (assets under management) of around 2.7 lakh crore. We can just do the simple math and see how big a behemoth can Jio Financial become," Gautam Baid, the Fund Manager and
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